The tax policy chief at the Ministry of Economy and Finance in South Korea, Ko Kwang-hyo, has announced that the country will delay the proposed crypto tax on digital assets until 2025. The 20% tax on cryptocurrency gains was slated to go into effect on January 1, 2023, but this will no longer happen.
South Korea crypto capital gains tax pushed to 2025
South Korea had initially planned to impose a 20% on cryptocurrencies at the beginning of this year. However, many investors opposed this move, and the tax levy was pushed to 2023.
The proposed tax involves a 20% levy charged in crypto capital gains surpassing 50 million won. This tax has now been pushed by another two years, and it is expected to go into effect in 2025.
The recently elected South Korean president, Yoon Suk-yeol, had previously said that the cryptocurrency tax would only be implemented after establishing a solid market infrastructure.
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South Korea is already working on integrating cryptocurrencies into its economic strategy. The plan to integrate crypto will be part of the “Digital Assets Basic Act” that will control the development of cryptocurrencies and digital assets trading.
South Korea as a crypto hub
South Korea is deemed to be among the largest crypto economies globally. By the end of 2021, the crypto market in the country grew to surpass $45 billion. Around 10% of the country’s population is believed to have interacted with cryptocurrencies.
The decision to rescind this tax is different from what has been happening globally. Many countries have been adopting crypto taxes to increase revenues, given the massive growth of the sector. India recently passed the Union budget that involved a contentious tax bill on unrealized crypto gains.
The recent postponement of the South Korea crypto bill to 2025 could be bullish for the crypto space. The sector has been embattled since the beginning of the year, and the tightening regulations have not been aiding the price recovery.
Some of the best altcoin exchanges are based in South Korea, and this recent move could trigger an increased adoption of digital assets in the country. The current president is bullish on the sector and might relax some stringent rules surrounding the digital asset sector. Increased trading volumes in the country could aid a sector currently facing a massive selloff.
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