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South Korea’s Democratic Party previously pushed back against another delay, saying it was a political trick by the ruling party.
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South Korea’s Democratic Party has backtracked on its push to implement the country’s crypto gains tax in 2025, agreeing to another two-year delay.
In a press conference on Dec. 1, the Korea Democratic Party (KDP) floor leader, Park Chan-dae, announced that the KDP agreed to a two-year moratorium on the implementation of digital asset capital gains tax proposed by the government and the People’s Power Party (PPP), the ruling party.
The law taxing crypto gains in the country is scheduled to come into effect in January. However, the new development will push the implementation of the tax by 2027.
The government earlier proposed a two-year grace period, while the PPP proposed a three-year grace period for the crypto gains tax.
South Korea’s Democratic Party takes U-turn on crypto tax
On July 12, the ruling party officially proposed to delay the implementation of the country’s tax on crypto trading profits.
The PPP argued that rapidly taxing crypto is “not advisable,” adding that investors may leave the market if the tax is imposed. The party wanted to push the implementation to 2028, making good on one of its promises during the election period.
Before taking a step back on implementing the crypto tax, the KDP strongly opposed the proposals by the South Korean government and the ruling party.
On Nov. 20, the KDP challenged the ruling party’s tax deferral plan, saying that it was simply a political trick that the PPP aimed to re-use in future elections. Instead, the Democratic Party said it would push forward with its plan to tax crypto in 2025.
Instead of delaying the crypto tax, the KDP suggested increasing the tax threshold from $1,800 to $36,000. The party said that only big players would be affected by this.
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A six-year delay in crypto taxation
South Korea’s plan to tax crypto gains was first scheduled to be implemented in 2021. However, backlash from crypto stakeholders pushed the government to delay the implementation of the tax to 2023. It was postponed to 2025, citing similar concerns for investor interests.
Once the tax is finally implemented, South Korean crypto investors will face a 20% tax on digital asset gains.
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This article first appeared at Cointelegraph.com News
