- The South Korean Democratic Party confirms its decision to implement a crypto tax by January 2025.
- Democratic Party’s policy committee Chairman, Jin Sung-joon, dismisses concerns about challenges.
- The party rejected suggestions for the suspension of the tax implementation for two years.
Jin Sung-joon, Chairman of the Korean Democratic Party’s policy committee, has confirmed that crypto taxation will begin in January 2025. Addressing concerns about technical and practical challenges during an interview on MBC Radio’s Attention View, he emphasized the government’s commitment to proceed without further delays.
“Virtual assets have little impact on the real economy,” said the Chairman while addressing the concerns surrounding crypto tax implementation in South Korea. He added that the legislation, first proposed four years ago and suspended twice, should not be delayed further to ensure legal stability and predictability. Though there were suggestions for suspending the tax implementation for the next two years, the government and the ruling party strongly opposed it.
South Korea’s Revised Crypto Tax Scheme
The updated legislation introduces a 20% tax on crypto gains exceeding 50 million Korean won (approximately $35,919), plus an additional 2% local tax. This replaces the earlier proposal to tax gains above 2.5 million won ($1,791), which faced strong objections from investors and was delayed twice.
Under the new policy, most retail investors are excluded from the tax scope. Additionally, taxpayers with incomplete records can claim 50% of the sale price as their acquisition cost. The revised scheme aims to address market concerns and improve investor confidence.
Read also: Crypto Tax Evaders Face Crackdown in South Korea
Despite these positive conditions, Jin stated that tracking coin transactions on foreign exchanges could be challenging. However, he added that the government could still implement the practice of taxing transactions that could be identified on domestic exchanges.
He noted that in 2027, the Organisation for Economic Co-operation and Development (OECD) will begin exchanging cryptocurrency transaction data among member nations, which could enhance tracking efforts globally.
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