South Korea’s opposition party has made a significant decision regarding the implementation of a new policy that would impose a tax on cryptocurrency earnings starting in January 2025. The Democratic Party of Korea (DPK) has agreed to delay the taxation of crypto assets, a move that contrasts with their previous stance against the ruling People Power Party’s (PPP) proposal.
Initially, the DPK had suggested increasing the tax threshold from 2.5 million won to 50 million won instead of postponing the taxation of cryptocurrency gains. However, the opposition party has now shifted its position and agreed to a two-year moratorium on the implementation of the crypto tax. This decision comes after the DPK floor leader, Representative Park Chan-dae, announced during a press conference that they no longer oppose the proposal to delay the tax.
In July, a group of 13 representatives had submitted a proposal to postpone crypto taxation by three years, citing a weak market sentiment at the time. They argued that taxing virtual assets prematurely could lead to a mass exodus of investors from the market, given the high-risk nature of cryptocurrencies. As a result, the tax enforcement date for virtual asset income, initially set for January 1, 2025, will now be postponed to January 1, 2028.
Despite the recent decision to delay crypto taxation, there is a possibility that South Korea may start taxing cryptocurrency income as early as 2027. This uncertainty reflects the ongoing debate and negotiations between political parties regarding the taxation of digital assets in the country.
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