9 months ago
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The ruling People Power Party of Korea believe that the establishment of regulations for cryptocurrencies is more important than implementing immediate taxation.
The ruling People Power Party in South Korea has recently suggested postponing the implementation of taxes on crypto gains for a period of two years. This delay is being proposed in light of the upcoming general elections in April. The party argues that it is important to first establish a comprehensive regulatory framework before introducing any taxation measures for crypto investments.
Initially, South Korea had planned to introduce a 20% tax on profits from crypto investments exceeding 2.5 million Korean won (approximately $1,875) starting in January 2023. However, this timeline was later pushed back to 2025 to allow more time for the development of regulations within the crypto industry
Now, the People Power Party is advocating for an additional two-year delay until 2027 as part of their election campaign promises. They believe that prioritizing the establishment of regulations for cryptocurrencies is more important than implementing immediate taxation. The party is expected to finalize its manifesto, including the proposed deferment of crypto taxes, by the end of this month.
Call for Alignment with Stock Market Taxes
The ruling party aims to eventually set the threshold for crypto taxes at the same level as the existing threshold for stock market taxes, which is 50 million won ($37,400). They argue that this would create a fairer tax system compared to the current low threshold of 2.5 million won for crypto gains.
On a separate note, the Ministry of Economy and Finance has been considering the possibility of completely eliminating income tax on cryptocurrencies. This is part of a broader effort to remove taxes on financial investments. However, it is important to note that the People Power Party is not proposing the abolition of crypto taxes at this stage. They are simply suggesting a deferment of the implementation of these taxes.
Broader Crypto Regulations in Development
The specific timeline and details of how cryptocurrencies will be taxed in South Korea are still being discussed and studied. The upcoming elections and changing regulatory priorities may influence the final decisions regarding this policy.
Currently, the ruling party’s main priority is to create a strong and reliable regulatory system before implementing taxes on gains from cryptocurrencies. This involves developing new rules and guidelines that address important aspects of the crypto industry, such as the responsibilities of custody providers and the requirements for listing tokens.
Creating a regulatory framework is an important step before implementing fair and effective taxation rules for cryptocurrencies in South Korea. These guidelines will ensure that people can use cryptocurrencies properly and lawfully. By following the regulations, individuals can be confident that they are abiding by the law while also fulfilling their obligations to the government when they earn profits from cryptocurrency investments. Moreover, establishing these regulations can encourage the development of innovative solutions within the crypto industry.
