South Korea Considers Postponing Crypto Taxation for Another 2 Years

South Korea’s ruling party, the People Power Party, is considering postponing the implementation of crypto investment income tax for another two years during the upcoming election campaign in April, according to a local media report. Aligning with the right-wing party’s “taxation after selection fee” principle for virtual assets. Under the principle, the party preserves the delay in applying taxation by the suggested time of 2027.

The proposal comes on the heels of a previous reset of the taxation period, which ran from January 2023 to January 2025. The main proposal to change this year suggests pushing it back by two years. This would establish a sound tax basis for virtual assets in the 22nd National Assembly.

Moreover, The government’s tax policy, as observed by the top leader of the People Power Party, aims to protect the properties and lives of the people. He also pointed out the potential risks of taxation without a tax base. In the light of the decision to postpone taxing, he said:

There’s no way to run a stock exchange or cases of handing over proof of income to virtual asset companies. It will be a pledge for a general election that should be aimed at 2030. There is a need for at least a two-year delay until the passage of such an amendment and the creation of such a system.”

Crypto Regulations & FSC’s Stance

The proposed crypto regulations will include the requirements for crypto custody providers and guidelines for token listing. The new crypto regulations would add to existing regulations in South Korea. These are expected to be effective by July 2024.

In contrast to South Korea’s stance, the US Securities and Exchange Commission (SEC) recently gave the green light to launch Spot Bitcoin exchange-traded funds (ETFs). In contrast, South Korea retained its crypto-restrictive policies by banning ETF-based crypto investments.

Furthermore, The world is actively debating how to tax and regulate cryptocurrencies. The global community closely observes countries’ approaches to this issue. The country’s approach to taxing and regulating cryptocurrencies is of keen interest to the world.

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