South Korean ruling party considers delaying cryptocurrency taxation as part of its campaign promise for the April parliamentary elections.

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South Korean ruling party plans to delay cryptocurrency taxation, a campaign promise?
Large gap between stock and cryptocurrency tax rates criticized as discriminatory

South Korean ruling party plans to delay cryptocurrency taxation, a campaign promise?

According to South Korean media under the Herald Media Group, the ruling party, the People Power Party, is attempting to further delay the capital gains tax on cryptocurrency earnings by two years and may use this as one of their campaign promises for the April parliamentary elections.

The virtual asset income tax system was introduced in December 2020 and was originally expected to be implemented starting in 2022. However, due to the need to establish supporting measures, it was delayed once again until January 2025 and now may have to wait until 2027.

( South Korean cryptocurrency earnings may be exempt from capital gains tax, authorities: Amendment estimated to pass parliament in February )

Large gap between stock and cryptocurrency tax rates criticized as discriminatory

The report points out that a plan to adjust the tax base is also under consideration. According to the current income tax law, income from the transfer or rental of virtual assets will be classified as other income for taxation starting from January 1, 2025. When the income exceeds 2.5 million Korean won, the tax rate is 22%, including local taxes.

However, the tax exemption threshold for stocks is as high as 50 million Korean won, while the tax exemption threshold for virtual assets is only 2.5 million Korean won. This has been criticized as “tax discrimination.”

An official from the People Power Party stated that the party’s higher-ups are finalizing the core promises for the elections before February and will announce them as soon as possible.

Previously, South Korean President Moon Jae-in had promised to increase the tax exemption amount for cryptocurrency investments, but in the end, it remained at the original proposal of 2.5 million Korean won.

( South Korean President Moon Jae-in’s election pledge changes, Ministry of Finance maintains original proposal for cryptocurrency tax threshold )

Heraldcorp
South Korean media

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