South Korea Delays Crypto Taxes until January 2023
Sophia Cruz • 1 min read
Following South Korea’s crackdown on unregistered crypto exchanges, the country plans to apply an income tax law on digital assets. The government has proposed a 20% tax on income over 2.5 million won earned from cryptocurrencies. Almost 54% of South Koreans are in favor of this move, while 38.3% disagree.
Representative Noh Woong-rae, from the Democratic Party of Korea, recognized some gaps in the legislation and stated that the assigned lawmakers lack the correct infrastructure to make this tax enforcement policy successful. Noh pointed out that cross-border transactions or peer-to-peer (P2P) transactions involving crypto are hard to secure with accurate tax data. He then proposed a “Partial Amendment to the Income Tax Act” that will defer the taxation of cryptocurrency in the country.
Noh implied that this amendment bill does not require the presence of the Finance Ministry. He further noted that if the Finance Ministry pushes ahead in taxing digital assets in 2022, it would undermine the trust of the people in their jurisdiction and encourage tax evasion. Along with the delay, these matters will be dealt with by the National Assembly. He believes that having a discussion about the tax amendment within the National Assembly will quickly resolve this issue.
The crypto industry has limitless potential in many ways. Therefore, implementing legislation and guidelines requires precise infrastructure to prevent further economical costs. South Korea is an exception with regard to achieving these terms.