South Korea postpones crypto tax until 2027

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The South Korean National Assembly has enacted a significant amendment to the Income Tax Act, bringing about substantial changes to the country's tax policy on financial investments and crypto. The amendment was passed in the plenary session on Tuesday and received overwhelming support. Specifically, 204 votes in favor, 33 against, and 38 abstentions out of 275 lawmakers present. The highlight of the amendment is the abolition of the Financial Investment Income Tax (FIT). This move is likely to boost market confidence. Previously, FIT would have applied a 20-25% tax on annual income over 50 million won (around $35,000) from investments in stocks, Bonds, funds, and Derivative products. According to local media, many supporters of this change, including the leader of the Democratic Party of Korea, Lee Jae-myung, argue that the tax abolition will reduce the financial burden on investors and encourage domestic market activity. However, some lawmakers have expressed caution. "There is no objective evidence that investment taxes have a negative impact on the stock market. This decision may inadvertently encourage high-risk investments, especially for young investors," local media reported, citing Democratic Party of Korea lawmaker Cha Gyu-geun. While the amendment to the Income Tax Act was passed, a proposed amendment to the Inheritance and Gift Tax Act failed. The proposal aimed to lower the highest inheritance tax rate from 50% to 40% and increase the minimum tax threshold. The proposal was rejected by 180 out of 281 lawmakers. Critics argued that such changes would disproportionately benefit high-income groups and exacerbate inequality. The abolition of FIT and the postponement of crypto taxation reflect South Korea's efforts to balance stimulating and regulating the market. However, the rejection of inheritance tax reforms reveals conflicting political views on wealth redistribution. As global crypto taxation policies evolve, South Korea's actions may impact its position in the competitive international financial landscape. Additionally, the initial plan to impose a 20% tax on virtual asset income exceeding 2.5 million won (around $1,750) annually, starting on January 1, 2025, has been postponed to January 1, 2027. This decision allows the regulatory authorities more time to address industry concerns and rationalize the preparatory steps for effective implementation. Supporters of virtual assets praise the postponement, seeing it as an opportunity to align South Korea's tax framework with the evolving global crypto trends. "This is an opportunity for South Korea to adapt to international standards and affirm its position as a digital asset hub," local media reported, citing a representative from the Korea Blockchain Association. South Korea's decision to postpone virtual asset taxation reflects broader global developments. Countries are reevaluating their approaches to crypto taxation. For example, the Czech Republic recently proposed exempting small-scale digital currency transactions up to 2,000 euros (around $2,100) from taxation, aiming to encourage the use of coins in everyday transactions. Similarly, amid the expanding crypto regulations, Russia is revising its tax legislation to bring clarity and structure to its tax regime. These changes are expected to include simplified tax reporting for individuals. Likewise, the Italian government has proposed reducing the crypto tax rate from 42% to 28% on profits over 2,000 euros. Overall, these actions signal efforts to attract investors and promote compliance. Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions. Join Telegram: https://t.me/tapchibitcoinvn Twitter (X): https://twitter.com/tapchibtc_io TikTok: https://www.tiktok.com/@tapchibitcoin Dinh Dinh According to Beincrypto

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