South Korea’s ruling Democratic Party of Korea (DPK) is planning to implement the long-delayed cryptocurrency tax regulations in early 2025, following a decision not to approve further delays, according to a local news outlet, the Seoul Shinmun.
The regulation, which would introduce a 20% tax (22% including local tax) on crypto gains, was initially slated for January 1, 2022. However, it faced two delays following strong opposition from investors and industry stakeholders. The report indicated that the DPK is now firm on rolling it out on January 1, 2025, despite proposals for further delays, including a suggestion to begin in 2028.
However, the party is revising the plan to increase the tax exemption threshold from gains below 2.5 million Korean won (approximately 1,795) to 50 million won (around 35,919). The revised plan also reportedly permits taxpayers to use a percentage of the sale price as an estimate for the original purchase price if accurate acquisition records are unavailable.
The Party stated that increasing the tax exemption threshold to 50 million would effectively minimise the tax’s impact, as only a small number of investors would surpass this limit.
The revised plan is set to be voted on by the National Assembly’s tax subcommittee on November 25, with a final decision expected at the legislature’s general meeting on November 26.
Meanwhile, in Paju, local authorities are ramping up efforts to recover unpaid taxes from residents using cryptocurrency to avoid payments. The officials of the South Korean city have warned 17 individuals with outstanding tax debts totalling 124 million won (around $88,600) that their crypto holdings will be seized and sold if payments are not made by the end of November.
The officials also noted that they plan to liquidate assets worth 50 million won if the debts remain unpaid. They emphasized their commitment to uncovering hidden assets and enforcing penalties, stating that digital currencies cannot shield against tax obligations.
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