The Democratic Party of Korea is pushing a plan to tax profits from Crypto from the beginning of 2025, but is offering a solution by raising the threshold for taxable profits.
On November 20, the local newspaper Seoul Shinmun Daily reported that the Democratic Party of Korea (KDP) has challenged the People Power Party (PPP)'s plan to postpone the Crypto tax until 2028.
The PPP, the ruling party of the country, had proposed on July 12 that the taxation of profits from Crypto would be postponed until 2028. However, the KDP stated in the report that the PPP's plan to postpone the Crypto tax is a political ploy that they intend to use again in the upcoming elections.
Increase the threshold from $1,800 to $36,000
For this reason, the KDP is pushing to implement the planned Crypto profit tax in 2025. According to the party, they are willing to agree to raise the threshold for Crypto capital gains subject to tax.
In the initial tax plan, Crypto investors had to pay a 20% Crypto profit tax annually on profits over 2.5 million won (about $1,800). However, the plan has faced strong opposition from stakeholders and Crypto investors.
Therefore, the KDP has proposed a new plan to raise this threshold to profits exceeding 50 million won (about $36,000). This will be similar to the taxable threshold for domestic stocks.
The KDP believes that expanding the taxable profit threshold is tantamount to completely eliminating the Crypto tax. The party argues that there will be no tax impact because only a few investors will achieve profits exceeding $36,000 from their Crypto investments.
The party believes that with the new threshold, only the big players will be affected by the Crypto capital gains tax in this country.
Postponement of Crypto Tax in South Korea
The Crypto capital gains tax in South Korea was initially expected to be implemented in 2021. However, opposition from stakeholders and Crypto industry leaders has led the South Korean government to postpone the implementation of this tax to 2023.
After politicians recognized the concerns of investors, it was postponed again until January 1, 2025. If the KDP and the ruling party reach an agreement, the 20% capital gains tax may be implemented next year.
