South Korean Gov’t to ‘Completely Review’ Crypto Tax Law
The South Korean government says it will “completely re-examine” the “need” to tax crypto traders on their earnings.
As things stand, traders are set to be taxed on their earnings from January 2025.
But per News1, the government will “review” its stance on the taxation of crypto trading profits. This follows a recent decision to do away with taxes on gold investment.
South Korean President Yoon Suk Yeol pledges to scrap the planned capital gains tax on income from financial investments in a bid to boost investor sentiment and stock values https://t.co/XyYECwGDGj
— Bloomberg Economics (@economics) January 2, 2024
The government wants to spark growth in the investment markets. But it could also revisit previous promises to revitalize the crypto industry.
At a press briefing, Jeong Jeong-hoon, the head of the Tax Department at the Ministry of Strategy and Finance, was asked if the government was still planning to go ahead with the launch of capital gains tax for crypto holders. Jeong replied:
“Cryptoasset taxation is also a matter that should be discussed in the National Assembly, after the abolition of gold investment tax.”
Crypto traders have complained that it is unfair that they should pay tax on their investments while gold traders are untaxed.
The government is likely to respond to “public opinion” on this matter, the media outlet reported.
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However, lawmakers will likely have the last say on crypto tax-related issues.
And with the Coin Gate scandal still rocking South Korean politics, many MPs will be hesitant about pro-crypto legislation.
Last year, an MP serving on a crypto regulation-related committee allegedly sold coins after receiving insider information about a future legal change.
Jeong suggested that Seoul intends to fast-track the gold tax law, and said that a bill would be ready for the Assembly by “late January or early February.”
The tax chief said that “if possible,” the bill could pass the committee stage and proceed to the house “before the general election.”
South Korea goes to the polls for legislative elections in April. The opposition Democratic Party currently dominates the chamber with a majority of over 50%.
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The issue of crypto taxation has been a particularly thorny, divisive, and long-running matter for the National Assembly.
Ugly squabbles about the matter broke out in the chamber in 2021. These saw government ministers arguing with their own party members about the need for crypto “tax equity.”
Further controversy also surrounds the existing law, which is slated to come into force on January 1, 2025.
The existing law would require all individuals with crypto-related earnings or trading profits above $2,100 per year to pay a 20% capital gains tax levy.
However, President Yoon Suk-yeol promised to raise the threshold to around $41,000 per year (the current limit for KOSPI traders) ahead of his election in 2021.
