South Korean authorities has postponed imposing crypto tax until 2025, mentioned in the official announcement. This new proposal aligns with President Yoon Suk-yeol’s view, which is of the opinion that crypto taxation is secondary.
The primary task at hand is to ensure that the market infrastructure is in place. Once the market infrastructure is established then the taxation of the asset class will be imposed. The 20% capital gains tax on crypto was initially expected to come into effect from the beginning of 2023.
After that decision, there has been number of reasons for the delay in imposing digital asset taxes. The tax plan was already delayed before. Now the new President has decided to postpone the taxation by two more years.
Once this reform is accepted then the crypto tax will be brought into action in the year 2025. The 20% tax shall be applied on crypto gains that surpass $1,900 in one year. Market enthusiasts are not completely on board with the decision as they feel that taxation above the $1,900 threshold is a little harsh. There are chances of small investors being negatively affected by the same.
The South Korean officials have announced these new tax reforms recently, the major reason behind the reformation is the market volatility. For taxation to be imposed, the market needs to be stable along with time needed to prepare policies that will be directed towards protecting investors. The plan of imposing the additional 20% tax on crypto gains above $1,900 (2.5 million won) remains unchanged.