South Korea’s opposition party has reportedly agreed to delay the implementation of a new policy that imposes a tax on cryptocurrency earnings starting January 2025.
The Democratic Party of Korea (DPK) previously pushed back against the ruling People Power Party’s (PPP) proposal to postpone crypto asset taxation, which was supposed to take effect in 2021 but has already been put on hold twice.
The DPK initially suggested increasing the tax threshold from 2.5 million won, or $1,784, to 50 million won ($35,688) instead of delaying the taxation of crypto gains, but the opposition is now changing its stance.
The Korea Herald reports that during a press conference on Sunday, DPK floor leader, Representative Park Chan-dae, said his party no longer opposes the proposal to postpone the implementation of the crypto tax.
“We have decided to agree to a two-year moratorium on the implementation of the cryptocurrency taxation proposed by the government and ruling party.”
In July of this year, 13 representatives submitted a proposal to delay crypto taxation by three years, citing an anemic market at the time.
“However, with investment sentiment toward virtual assets deteriorating, some argue that hasty taxation of virtual assets is not desirable right now, as virtual assets are high-risk assets with a higher risk of loss than stocks, and if income tax is also imposed, most investors are expected to leave the market.
Accordingly, the tax enforcement date for virtual asset income, currently scheduled to be taxed from January 1, 2025, will be postponed for three years to January 1, 2028 (Article 37, Paragraph 5 of the Bill).”
But with recent developments, South Korea may start taxing crypto income as early as 2027.
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