South Korea's new tax amendment law officially postpones the application of crypto tax until 2027 and abolishes financial investment tax, paving the way for investors.
South Korea postpones crypto taxation until 2027
According to Yonhap News, the South Korean National Assembly has passed the amendment to the Financial Investment Income Tax Act, with 204 votes in favor, 33 votes against, and 38 abstentions out of a total of 275 participating members.
Accordingly, the financial investment income tax - applied to income over 50 million won (34,931 USD) from investments in stocks, bonds, funds and derivative products - will be completely abolished.
At the same time, the imposition of tax on income from digital assets (including crypto) will officially be postponed from the initial January 1, 2025 to January 1, 2027, i.e., a 2-year delay compared to the initial proposal, in order to give the crypto market more time to stabilize before implementation.
South Korea's National Assembly has approved the postponement of cryptocurrency taxation until 2027.
— Wu Blockchain (@WuBlockchain) December 10, 2024
As previously reported, South Korea plans to impose a 20% tax on cryptocurrency gains (22% as local tax), which was originally scheduled to take effect on January 1, 2022. Due…
As Coin68 has reported, South Korea's financial authorities had planned to impose a 20% income tax on cryptocurrency transactions from January 1, 2022, as the trading volume of these assets has been "surging".
However, the crypto taxation policy has faced strong opposition from investors since its introduction. In response to the fierce reaction from investors and industry experts, South Korea has twice postponed the implementation of the above tax rate: the first time to 2023 and the most recent time to 2025.
Previously in July, there was also a proposal to postpone the crypto income tax to 2028. In early December, the Democratic Party of Korea (KDP) agreed with the proposal from the government and the People Power Party (PPP) to extend the crypto tax implementation from 2025 to 2027, but it was still pending final voting by the National Assembly.
Today, December 10, 2024, the South Korean National Assembly has voted to officially approve the proposal to postpone the application of financial tax on crypto until 2027.
When the crypto income tax is officially implemented, investors in South Korea will have to pay a 20% tax on their profits from digital asset transactions (which can go up to 22% including local tax) if the profits exceed 50 million won (34,931 USD), instead of the previous threshold of 2.5 million won (1,746 USD).
However, not only South Korea, but many major economies around the world such as France, the US, the UK, Japan... are considering or have already implemented crypto taxation.
Compiled by Coin68
