As a seasoned crypto investor with a decade-long journey under my belt, I find myself at a crossroads with South Korea’s impending crypto taxation. Having navigated through numerous market fluctuations and regulatory changes worldwide, I must admit that every nation’s approach to the digital asset landscape is unique, and South Korea is no exception.
In simpler terms, starting from 2025, South Korea’s Democratic Party plans to implement a tax on cryptocurrency earnings. However, they also propose a solution by raising the limit for taxable crypto gains.
As an analyst, I’d like to share a recent development: On November 20th, I came across a report from Seoul Shinmun Daily indicating that the Korea Democratic Party (KDP) has contested the People’s Power Party’s (PPP) proposal to postpone cryptocurrency taxation until 2028.
On July 12, the governing party PPP suggested postponing the taxation of cryptocurrency gains until 2028. However, according to the KDP’s report, the PPP’s strategy to defer crypto taxes is a political maneuver they plan to use in upcoming elections, as claimed by the KDP.
Increasing the threshold from $1,800 to $36,000
Due to this development, the KDP plans to enforce their proposed crypto gains tax in 2025. The political party is open to raising the limit for taxing cryptocurrency capital gains.
Under the initial proposal, individuals who earn profits from cryptocurrency investments would be required to pay a 20% tax on any gains exceeding 2.5 million won (approximately $1,800) annually. This has sparked criticism and opposition from stakeholders and crypto investors alike.
As a researcher, I found an intriguing proposal from the KDP that aims to elevate our potential earnings beyond the 50 million won mark, equivalent to approximately $36,000. This strategic move resembles the nation’s benchmark for stock investments.
In simpler terms, the KDP proposes that increasing the limit for taxable crypto gains might seem equivalent to eliminating the crypto tax altogether. They argue that due to this increase, only a small number of investors are likely to earn over $36,000 in crypto profits, thus minimizing the overall tax impact.
As a crypto investor, I strongly suspect that the new threshold for capital gains tax on cryptocurrencies will primarily impact the larger players within our nation.
Crypto taxation delay in South Korea
Initially set for implementation in 2021, the proposed capital gains tax on cryptocurrency by South Korea was postponed due to opposition from crypto investors and industry influencers. As a result, the South Korean administration decided to defer the enactment of this tax until 2023.
Once politicians acknowledged the investors’ worries, they decided to push back the implementation date to January 1, 2025. If the KDP and the governing party come to an agreement, a 20% tax on capital gains might be enacted as early as next year.
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2024-11-20 13:49