South Korea delays cryptocurrency tax until 2028
Date: 2024-07-15 Author: Oliver Abernathy Categories: IN WORLD
South Korea initially planned to introduce a tax on cryptocurrency income in October 2021. According to the proposal, it was supposed to levy a 20% tax on crypto investors whose profits exceed 2.5 million won (about $1,900) per year. However, this proposal was delayed until 2023 due to the upcoming presidential elections in 2022 and the lack of necessary tax infrastructure. The tax was later pushed back to 2025, sparking strong reactions from investors and industry experts.
Presidential statements and reasons for postponement
South Korean President Yoon Suk-yeol explained that the authorities need more time to prepare measures to protect investors. The government has expressed concern about the potential tax burden that the new regulation will place on investors. Yeol noted the need to create a clear legal framework for cryptocurrencies before introducing a 20% tax. He believes it would be right to delay the implementation of the tax until laws are passed to ensure transparency and investor protection.
“Currently, investor sentiment towards cryptocurrencies is negative. Most investors are expected to exit the market if the country imposes income tax on cryptocurrencies, which are considered riskier than stocks,” the authorities noted.
Current status and plans for the future
South Korea's Ministry of Economy and Finance said that a final decision on delaying the introduction of a tax on cryptocurrencies has not yet been made. At the end of July, the Ministry of Finance plans to announce new amendments to the Tax Code.
In 2021, South Korea has promised to introduce a tax on gifted and inherited cryptocurrencies. In addition, a few months ago, local authorities launched an intelligent system to identify tax evaders. This system should help combat tax evasion by using advanced technology to monitor transactions and identify suspicious activity.
Expectations and prospects
Delaying the introduction of a cryptocurrency tax until 2028 could give South Korean authorities enough time to develop a comprehensive legal framework that will protect the interests of investors and ensure transparency in the cryptocurrency market. This could also help improve investor sentiment and keep the cryptocurrency market active, avoiding sharp capital outflows.
South Korea continues to be one of the key players in the cryptocurrency space, and its decisions could have a significant impact on the global market. It is important that all new measures and regulations are carefully thought out and balanced, taking into account the interests of both the state and private investors.
