Government of South Korea postpones crypto tax rule changes
By Bob Garcia
The South Korean National Assembly announced that it will be delaying new capital gains tax on cryptocurrency trades. Profits on cryptocurrency transactions were expected to be taxed at a rate of 20% beginning October 2021. Although the proposed rate remains, taxes will not be charged until January 1, 2022.
The delay comes after successful appeals from the financial industry, which has been arguing since July that exchanges would need more time to upgrade their systems to reflect these new measures.
The upcoming cryptocurrency tax does not apply to all transactions. Rather, only capital gains in excess of 2.5 million won, or the equivalent of $2,255 US dollars, are subject to taxes.
Although the government has agreed to a 90-day delay in implementing the new tax laws, local crypto exchanges were hoping to delay the regulations until at least 2023, a full 15 months after the date that was first proposed. The National Assembly has agreed on the January 2022 date, but the Tax Subcommittee still needs to formalize the matter.
The Korean Blockchain Association had complained that implementing tax changes on short notice would be an unfair burden to crypto exchange operators. Currently, digital assets count as currencies and are not subject to taxes.
Cryptocurrencies are back in vogue throughout South Korea and across the globe as Bitcoin gets closer to its all-time high. Virtual currency trading in South Korea has been fully legal since March, although exchanges must cooperate with banks to prevent anonymous trading in the country.