South Korea has delayed the implementation of its controversial 20% cryptocurrency tax for the third time, extending the deadline to 2027, due to ongoing disagreements and the need for additional institutional preparations.
Reasons for the Postponement
Democratic Party floor leader Park Chan-dae cited the need for more institutional preparation and a comprehensive overhaul of existing frameworks, stemming from ongoing disagreements between the ruling and opposition parties regarding crucial details of the tax policy.
Tax Policy Plans and Changes
The revised plan allows taxpayers to estimate the original purchase price using a percentage of the sale price if they lack accurate acquisition records. It proposes raising the tax exemption threshold to 50 million won, likely reducing the tax impact.
Implications and Next Steps
Initially set for 2021, the crypto tax has been postponed multiple times. It proposes a 20% tax plus a 2% local levy on annual profits over 2.5 million won. Lawmakers favored the ruling People’s Power Party’s motion to delay implementation.
The postponement reflects ongoing legislative debates and a need for further adjustments in the legal framework. This decision is likely to affect trading volumes and the overall market dynamics in the country.
