The South Korean government has postponed the introduction of a 20% tax on cryptocurrencies for two years. The new law was to come into force on January 1, 2023. Government officials announced that the decision was made amid a sluggishness in the crypto market and additional time needed to prepare measures to protect investors.
Initial plans to impose a tax on cryptocurrency profits exceeding 2.5 million won ($1,900) in one year remain unchanged. The new bill has sparked controversy in the South Korean cryptocurrency community. The document was first announced in January 2021 and was originally planned to be put into effect from January 2022. The current transfer was the second in a row.
Tax subcommittee chairman Kim Young-jin, and one of the lawmakers opposed to tax policy on digital currencies, called for the development of heavy-duty regulations for the industry first. The administration of the new president of the country intends to follow this path and develop a clear framework for controlling the industry, and only after that introduce tax rules.
Since the cryptocurrency market in South Korea has grown to a colossal size in recent years, the topic of industry taxation has become central to some parliamentarians and officials.
A draft Basic Digital Assets Act (DABA) is reportedly in the works and will come into effect by early next year. The rules will focus on NFTs and ICOs, expanding infrastructure, and supporting central bank digital currency (CBDC) research.
Earlier, law enforcement and regulators of the United States of America and South Korea agreed to share information about cases related to the crypto industry, and especially about the development of the situation with Terra-LUNA.
