South Korea Proposes Delaying Capital Gains Tax on Crypto Traders

The ruling Democratic Party Toburo in South Korea intends to pass a law that would delay by one year the introduction of a capital gains tax on cryptocurrency trades, according to local Media.

Earlier, the Ministry of Economy and Finance determined that the new requirements would take effect from 1 January 2022. The tax would be 20% of profits earned above 2.5 million won (~$2,122).

National Assembly member Noh Woong-rae said that the introduction of the tax is not technically prepared. In his words, the ministry’s policy on this issue is “an administration that ignores reality”.

For example, the tax authorities are currently extremely hard to obtain tax data on trades on foreign exchanges or P2P transactions, the parliamentarian said. This could create “blind spots” and, instead of fair taxation, would foster evasion and undermine trust in the government, he noted.

“In a situation where the relevant tax infrastructure is not adequately prepared, delaying the taxation of virtual assets is no longer an option — it is inevitable,” Noh Woong-rae said.

The bill is under consideration by the relevant parliamentary committee. According to the lawmaker, the party expects its passage by 1 October.

Finance Minister Hong Nam-ki has already promised that the requirements will take effect from 1 January 2022, despite opposition from the ruling party. 

He reminded that last year the law on cryptocurrency transactions taxation was supported by the government, the opposition, and the Democratic Party, which has a slim majority in parliament.

As reported in a survey, the introduction of the tax approved by more than half of the residents of South Korea.

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