On Thursday, the South Korean government introduced a crypto tax reform and proposed to postpone the recommended 20% tax imposition on digital assets profits for two more years. This implies that the earnings will be taxed from 2025 if the proposal gets accepted.
As TheCoinRise keeps reporting the regulatory situation in the country, the government has originally decided to kick in the crypto tax imposition from January 2022. However, on November 29, South Korea’s Tax Subcommittee members in the National Assembly decided on a bipartisan agreement by approving an amendment proposal to postpone the crypto tax by 2023. In December, the previous government approved the plan for a year following a major backlash from the inventors in the country.
Now, the Finance Ministry is reportedly working on submitting the bill related to the tax reforms in the National Assembly before September 2.
According to the reports by local media, South Korea is working on a regulatory framework for the crypto ecosystem in the nation, the “Digital Asset Basic Act,” which is most likely to be introduced in 2024.
Everything about the new government’s crypto tax plans
The new government’s economic policy plan includes the crypto tax reforms that state that the upcoming Digital Asset Basic Act aims to govern ICOs and cryptocurrency listing, among other things.
Yoon Suk-yeol had stated before the election that taxation of cryptocurrency earnings should delay until the digital asset market had been given the right market infrastructure.
The minimal taxable income from cryptocurrency activities is still KRW 2.5 million ($1,900) per fiscal year.
According to TheCoinRise, the South Korean government made a hint about taxing crypto gains back in January 2020. According to the proposed crypto tax system, a 20% deduction will be made from profits over 2.5 million Korean won made between crypto transactions and trading.
However, because of the alleged possibility of tax fraud, the government is considering changing the hotly anticipated crypto tax system. The country’s investors have just been warned of severe punishments for tax evasion using cryptocurrencies.