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After a delay in plans to implement taxation, the government in South Korea – the Democratic Party of Korea (DPK) – will move ahead with the enforcement of a 20% crypto tax.
This hike was originally planned for January 2022, but the plans faced criticism from industry experts and investors which caused it to be halted.
Now, the government hopes to process the necessary legislation on November 26 which would see people in South Korea having to pay income tax on their crypto profits from 2025.
The tax committee vote will commence on November 25, followed by the Assembly’s final vote the next day.
With the back-and-forth, some rumors suggested the tax wouldn’t be implemented until 2028 but this has now all been changed as the government makes advances.
Crypto tax in South Korea could be implemented for 2025
The decision will include the taxing of any realized or unrealized gains over 2.5 million won (roughly $1,791) as this will be included in a person’s taxable income for each year. This means all crypto profits above the threshold will be taxed at the 20% rate.
It’s unclear if the changes will see an impact on trading or on the cryptocurrency industry in South Korea.
According to data from Chainalysis, South Korea is in the top 20 areas for global crypto adoption with it being in the company of the United States, Brazil, Canada, and more.
It was also named one of the world’s most crypto-friendly areas in 2024 by a study looking at regulatory policies, tax frameworks, and business conditions.
It was in mid-November when Bloomberg reported that South Korea has a huge following of crypto adopters. The ‘crypto mania’ was said to have taken off in 2017 due to the Bitcoin surge and a flurry of new coin offerings.
In 2018, the central bank in South Korea had to ask its own staff to refrain from trading crypto.
The locals even stuck with the currency when the market experienced turmoil and several ups and downs. The publisher says more than seven million people – almost 15% of the population – are registered to trade on a crypto exchange.
The Korean won even overtook the US dollar this year as the most popular currency for crypto transactions.
Featured Image: AI-generated via Ideogram
