South Korea just gave its cryptocurrency industry a major reprieve. The government has decided to delay implementing capital gains tax on crypto until 2027 – that’s a two-year postponement!
Tax Delay: Round Two
This isn’t the first time the tax has been pushed back. Initially slated for 2025, then postponed, it’s now officially delayed until 2027. The current political climate made implementing the tax next year too difficult.
Political Deal Leads to Delay
The Democratic Party of Korea and the ruling People’s Power Party reached an agreement to postpone the crypto tax. The People’s Power Party initially wanted to delay it even further, to 2028.
A Compromise on Tax Deductibles?
Initially, the Democratic Party suggested increasing the tax-deductible amount from 2.5 million won to 50 million won as an alternative to delaying the tax. However, they ultimately agreed to the postponement. They did, however, make it clear they wouldn’t support other government tax proposals that they felt favored the wealthy.
Time to Assess and Prepare
This two-year extension gives the government time to assess the impact of the tax. It also gives crypto traders more time to get ready for the 20% capital gains tax that will eventually apply to their digital asset profits. This isn’t the first delay; the tax was originally planned for 2021, then 2023, and now 2027.
