South Korea to postpone cryptocurrency taxation for another two years

The left-wing Democratic Party of Korea (DPK) said it had agreed to a two-year postponement of the introduction of a tax on profits from virtual assets. The proposal came from the government and the ruling People's Power Party, The Korea Herald reported.

According to DPK leader Park Chan-dae, the party made the decision because the tax plan requires further regulatory clarification. The DPK has a majority in the legislature — The country's National Assembly.

This is the third time since 2021 that the South Korean government has postponed consideration of the process of taxing crypto assets.

A 20% tax is to be imposed on cryptocurrency income exceeding 2.5 million Korean won (about $1,780 at the time of writing).

Previously, the KDP had insisted that the tax plan take effect on January 1, 2025, but with a higher non-taxable threshold of 50 million Korean won (or $35,606) instead of the current threshold of 2.5 million won.

However, Park Chan-dae remains opposed to the government's inheritance and gift tax bills, which “benefit the super-rich”, and wants to reduce the inheritance tax rate from the current 50% to 40% for the richest group of the population.

It should be noted that the South Korean exchange Upbit is the fifth among all crypto exchanges in the world, according to CoinMarketCap data.

It should also be recalled that despite the fact that in late June 2023, South Korea approved its first separate bill on digital assets, the government banned the launch of cryptocurrency ETFs in the country.