Last updated on December 4th, 2024 at 12:40 pm
South Korea has delayed the implementation of its controversial 20% cryptocurrency tax for the third time, extending the deadline to 2027.
Democratic Party (DP) floor leader Park Chan-dae announced a postponement of cryptocurrency tax enforcement, citing the need for more institutional preparation and a comprehensive overhaul of existing frameworks. This decision stems from ongoing disagreements between the ruling and opposition parties regarding crucial details of the tax policy.
The revised plan allows taxpayers to estimate the original purchase price using a percentage of the sale price if they lack accurate acquisition records. It proposes raising the tax exemption threshold to 50 million, lessening the tax impact as few investors exceed this limit.
The National Assembly is set to vote on the plan on December 2, 2024, and a delay seems likely due to a bipartisan agreement.
Initially set to take effect in 2021, the crypto tax has been postponed multiple times and is now scheduled for 2027. It proposes a 20% tax plus a 2% local levy on annual profits over 2.5 million won. The Democratic Party has opposed the delays, wanting enforcement in 2025 and a higher tax exemption threshold. Crypto exchanges have criticized the low threshold, warning it could negatively affect trading volumes.
Park hinted at potential amendments, stating there is still room for debate regarding the broader package of 13 bills, including the crypto tax proposal. “If the government remains inactive, an even greater reduction is possible with the revised plan,” he added, leaving the door open for further adjustments.
Notably, the postponement aligns with the government’s rejection of the DP’s proposal to increase the annual tax exemption threshold from 2.5 million won ($1,781) to 50 million won ($35,633). Instead, lawmakers supported the ruling People’s Power Party’s (PPP) motion to delay the tax’s implementation, initially set for January 2025.
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