A new amendment to South Korea’s income tax law, which includes delaying the taxation on crypto gains by one year, was agreed upon by South Korean political parties at the National Assembly today.
Fast facts
- The ruling Democratic Party and the opposing conservative People Power Party officially made a resolution at the National Assembly Strategy and Finance Committee’s tax subcommittee meeting today to delay the 20% levy on cryptocurrency gains from Jan. 1, 2022 to Jan. 1, 2023. The new amendment of the income tax law will be finalized Tuesday at the plenary session.
- South Korea’s income tax law amendment announced earlier this year mandates a tax on virtual asset gains over 2.5 million Korean won (about US$2,097) starting Jan. 1, 2022. The announcement caused backlash from investors and tax experts, with many arguing taxation on crypto gains is too soon. Others claimed it is unfair, as crypto income is to be taxed over 2.5 million won, while a 20% tax on stock capital gains is scheduled to start on Jan. 1, 2023 at 50 million won, around US$41,946.
- While the scheduled date of cryptocurrency gains tax was postponed successfully, the tax subcommittee could not agree on raising the tax deduction threshold for crypto investors from 2.5 million won to 50 million won, as many investors requested. The matter is to be discussed again in the future.
- Oh Moon-sung, professor of tax accounting at Hanyang Women’s University, told Forkast.News that it is safe to say the virtual asset gains tax has been postponed, as there will be no more dispute within the National Assembly.