South Korea Pushes Back The 20% Tax On Crypto Gains Until 2025
According to reports, the South Korean government has delayed the 20 percent tax on cryptocurrency earnings by two years. The contentious 20% tax on cryptocurrency earnings was originally set to take effect on January 1, 2023, but it has now been postponed to 2025.
On July 21, government authorities unveiled their new tax reform proposals, delaying the crypto tax policy until 2025 and claiming the need for time to prepare investor safety measures. The original intention was to impose an additional 20% tax on cryptocurrency gains surpassing 2.5 million won ($1,900) over the course of a year.
Since it was first proposed in January 2021, the contentious 20 percent cryptocurrency tax has already been postponed twice. The tax was initially scheduled to go into effect in January 2022, but lawmakers in the nation postponed it until 2023, and it has now been delayed by an additional two years.
Korea is planning to initially regulate the cryptocurrency
One of the politicians opposing to the crypto tax policy, Kim Young-jin, Chairman of the Tax Subcommittee, has urged for the creation of strong crypto regulation first. Korea is planning to initially regulate the cryptocurrency market before enacting tax regulations with a newly elected pro-crypto President leading the nation.
As the cryptocurrency market reached new highs over the past few years, taxing cryptocurrencies has been a primary priority for the government. Thailand planned a 15 percent tax on cryptocurrency earnings, similar to South Korea’s proposed 20 percent tax, but it faced fierce opposition from the retail sector and ultimately had to abandon the tax plan.
Beginning on April 1st, India put a 30% tax on cryptocurrencies; nevertheless, the high taxation has had a disastrous effect on the country’s crypto exchanges, as trade volumes fell by more than 90% within weeks of the implementation of the new tax regulations.
The newly elected president is reportedly planning to introduce the Digital Asset Basic Act (DABA) before the beginning of next year, according to a report that was leaked in May of this year. NFTs and ICOs would be a primary emphasis of the legislation, which would also encourage CBDC research and infrastructure development.
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