Crypto tax is set to launch in South Korea in January 2027 after lawmakers finally agreed a deal to postpone levies on crypto trading for a further two years.
The Democratic Party (DP), the largest party in the National Assembly, had threatened to thwart the ruling People’s Power Party (PPP)’s plans to postpone the launch.
But the DP’s late bid to amend existing law in favor of its own proposal to instead raise the annual tax threshold for crypto traders has failed.
Crypto Tax Launch Delayed Yet Again
Money Today reported that Park Chan-dae, the DP’s floor leader, said the party had agreed to the government’s plan. Park was speaking at a press conference at the National Assembly on December 1.
Park said the decision had been made “after in-depth discussions on the postponement of taxation on virtual assets.”
He agreed that “more institutional preparation” was “needed” before tax bodies started trying to tax crypto traders.
This appears to echo the sentiments recently voiced by the DP leader Lee Jae-myung. Lee argued that crypto tax was not yet “systematically possible.”
“We will process the government’s income tax law amendment bill to defer taxation on virtual assets at the National Assembly plenary session on December 2.”
Park Chan-dae, lawmaker and DP Floor Leader
It appears that the DP is making the concession so it can focus its attention on bills on the separate taxation of dividend income and the easing of inheritance tax, both of which it opposes.
A South Korean crypto trader surnamed Kim told Cryptonews.com on December 1:
“This whole situation about crypto tax is a complete mess. And politicians are squarely to blame for all of this. As a crypto investor, of course, I am happy not to pay tax. But this situation has been badly mishandled by the government, the opposition, and everyone else.”
People Power Party Rep. Na Kyung-won proposed introducing a policy similar to France’s "Pacte Civil de Solidarite" to offer legal protection for children born to unmarried parents.https://t.co/i889BwHZe1
— The Korea Herald 코리아헤럴드 (@TheKoreaHerald) December 1, 2024
Third Delay
Lawmakers first voted in favor of launching crypto tax in December 2020. The levy was first scheduled for launch on January 1, 2021.
However, its debut has since been postponed twice, on both occasions with just weeks to go before launch.
Korea's exports grow for 14th month in Nov. on record shipments of chipshttps://t.co/9iqTzZH7h2
— The Korea Times (@koreatimescokr) December 1, 2024
DP lawmakers last week tried to convince the government to accept a rival bill. This bill proposed launching crypto tax per the existing schedule (January 2025).
But the bill also proposed raising the annual threshold to 50 million won (around $36,000). This would have given crypto investors parity with stock market trading. The party reportedly claimed:
“Most investors, except for a very small number of large-scale traders, will not end up being subject to taxation [under our proposal].”
However, the PPP appears to have rebuffed the DP’s various attempts to force its bill through National Assembly subcommittees last week.
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