- South Korea’s proposed tax regime for crypto-related ventures met a bottleneck.
- The ruling party and the opposition disagree on 11 non-contentious tax bills.
- South Korea targets January 1, 2025, as the implementation date of the new tax laws.
South Korea’s proposed tax regime for crypto-related ventures met a bottleneck when the country’s National Assembly’s Strategy and Finance Committee failed to convene its plenary session. The legislators could not hold the meeting scheduled for November 29 due to disagreements between the ruling and opposition parties.
Lawmakers had initially planned to discuss changes in tax laws, including the potential postponement of taxes on virtual assets. Proposed adjustments included easing inheritance tax and adjusting the taxation of dividend income.
Reports indicate the disagreement between the ruling party and the opposition stems from 11 non-contentious tax bills. The ruling party wanted to advance the bills, but the opposition rejected this approach.
Read also: South Korea Confirms Crypto Tax in 2025 With Revised 20% Scheme
Disagreement Over Crypto Tax Timeline
It is worth noting that South Korea’s Democratic Party (KDP) wants to implement a tax on cryptocurrency gains starting in 2025. The People’s Power Party (PPP) opposes this plan and proposes a delay until 2028. In an effort to reach its target, the KDP has adjusted the proposal’s details, raising the threshold for taxable gains from 2.5 million won ($1,800) to 50 million won ($36,000).
Notably, the new proposal promoted a tax exemption for low-crypto-income earners, leaving only investors who make a substantial income from cryptocurrency to pay tax. That aligns with South Korea’s mainstream tax regime, where only investors earning from 50 million won are liable to pay tax.
For context, this is not the first time the South Korean crypto tax regulation proposal has faced delays due to opposition. The government first attempted to implement the tax in 2021, but a disagreement between the opposing parties pushed it to 2023.
Despite the ongoing disagreements, the Korean government maintains that it will implement a new crypto tax regime by January 1, 2025, unless political maneuvers force a change in the timeline.
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