Representatives of the opposition party “People Power” in South Korea have drafted a proposal to defer the introduction of a capital gains tax on cryptocurrency trades. The Korea Herald reports this.
It is expected that the document will be submitted to the National Assembly on Tuesday, October 12.
Earlier, the Ministry of Economy and Finance determined that the new requirements would take effect on January 1, 2022. The tax would be 20% on profits exceeding 2.5 million won (~$2,090).
In September, lawmakers from the ruling Democratic Party attempted to postpone for a year the taxation of digital assets. They said the initiative was due to the infrastructure not being ready.
The government succeeded in obtaining the rejection of the legislators’ proposal, keeping the previous timelines in force.
The bill from the People Power Party envisages not only the introduction of the tax from 1 January 2023, but also changes to the rates.
Lawmakers proposed a 20% tax on profits in the range of 50-300 million won ($42,000-$251,000) and 25% on amounts above 300 million.
This aligns with the taxation rules on profits from financial investments, which the authorities plan to introduce in 2023.
“It is wrong to impose taxes at a time when the legal definition of virtual currency is unclear. The aim is also to simplify the base to the level of the tax on profits from financial investments, so that cryptocurrency investors do not end up at a disadvantage,” explained a party spokesman.
As reported, authorities in Korea recorded a surge in illicit currency transactions involving digital assets. In seven months the volume of such transactions reached 812.2 billion won — 40 times higher than all of 2020.
In July, the customs service said that in just two months it identified 33 people who carried out cryptocurrency-related illicit cross-border payments.
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