South Korea’s Democratic Party agreed to delay the crypto tax bill to 2027, citing the need for more regulatory preparation. The National Assembly will vote on the proposal, supported by both major parties, on December 2, 2024.
The Democratic Party floor leader, Park Chan-dae, announced at a press conference that the DP has consented to the government’s proposal to postpone the tax on crypto merchants for an additional two years, thereby delaying the bill from 2025 to 2027, as reported by the local media outlet Money Today.
Park stated that the government must undergo additional institutional preparation before regulators can commence the systematic taxation of crypto traders.
“After in-depth discussions on the postponement of taxation on virtual assets, I thought that now is the time for additional institutional overhaul,” said Park.
The National Assembly will deliberate on Dec. 2, 2024, to determine the fate of South Korea’s crypto tax proposal. Both parties have reached an agreement to postpone the tax.
The DP had initially opposed the People’s Power Party’s plans to postpone the launch, insisting that the 20% tax on crypto merchants must be implemented in January 2025.
Furthermore, the DP had also suggested that the annual tax threshold be increased from 2.5 million won ($1,781) to 50 million won ($35,633).
However, the government had rejected the proposal of the primary opposition party and instead voted in favor of the PPP’s motion to postpone the crypto tax until 2027.
Furthermore, Park stated that there is still area for negotiation with respect to the 13 bills that the government has proposed, including the crypto tax bill, the inheritance bill, and the gift tax bill, among others.
This implies that the 20% levy on crypto traders who generate a profit of at least 2.5 million won is still subject to modification.
“If the government does not take any action, an even greater reduction is possible with the revised plan [which modifies the current reduction plan],” said Park.
The virtual asset tax measure has been postponed by the South Korean government for the third time. The measure was initially introduced in December 2020 and was intended to be implemented as early as 2021. However, it was ultimately postponed until 2025. Presently, there is a substantial likelihood that it will be postponed until 2027.
Crypto Tax Bill Effect
The law would impose a 20% tax on profits exceeding 2.5 million won, or approximately $1,781, in addition to an additional 2% local tax.
The 2.5 million won threshold was opposed by numerous significant crypto exchanges, who contended that a 20% tax on the base deduction would result in a significant decrease in trading volumes.South Korea’s Democratic Party agreed to delay the crypto tax bill to 2027, citing the need for more regulatory preparation.
