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South Korea’s ruling party plans to delay cryptocurrency taxation, becoming an election promise?
Stocks and cryptocurrency tax rate gap criticized for tax discrimination
South Korea’s ruling party plans to delay cryptocurrency taxation, becoming an election promise?
According to media under the South Korean Herald Media Group, the ruling party in South Korea, the People Power Party, is trying to delay the capital gains tax on cryptocurrency earnings for another two years and may use it as one of their campaign promises for the April parliamentary elections.
The virtual asset income tax system was launched in December 2020 and was originally scheduled to be implemented in 2022. However, due to the need to establish supporting measures, it was delayed again until January 2025, and now it may have to wait until 2027.
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South Korean cryptocurrency earnings may be exempt from capital gains tax, authorities: amendments estimated to pass through parliament in February
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The report pointed out that the 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-free threshold for stocks is as high as 50 million Korean won, while the tax-free threshold for virtual assets is only 2.5 million Korean won, which has been criticized as “tax discrimination.”
An official from the People Power Party stated that the senior management’s position is to finalize the core promises of the election before February and will announce it as soon as possible.
Previously, South Korean President Moon Jae-in promised to increase the tax-free amount for cryptocurrency investments, but in the end, it remained at the original proposal of 2.5 million Korean won.
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South Korean President Moon Jae-in’s election promise changes, Ministry of Finance maintains original proposal for cryptocurrency tax threshold
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Heraldcorp
South Korean media
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