South Korea Delays Proposed Crypto Taxes to 2023

SOUTH KOREA: Taxes presented previously to be applied this year on cryptocurrency have been delayed. Commissioners in the country have decided to postpone these until January 1, 2023. Until then, they will find a way to classify crypto as financial investment income.

A representative of the ruling party Roh implemented the decision. Originally, the new rules for the taxation of virtual assets should have applied in July. The representative proposed a “partial amendment to the Income Tax Act” which should include various tax deductions. At the same time, the representative also said they aim to push the bill ahead of the target date in October.

To give context, the Ministry of Strategy and Finance passed the Income Tax Act earlier which classified virtual assets as “other income”. The new classification allowed the commission to levy 20% on income over 2.5 million won annually.

The new rules will apply in January of 2023, but it seems like crypto investors will pay taxes starting from January 1, 2022.

Many in the South Korean crypto community have taken this as a positive sign. The fact that the government intends to build a comprehensive tax framework for cryptocurrencies is very encouraging. In the long term, this could mean a possible integration of crypto into the mainstream economy. This will hugely boost industry growth.