Democratic Party of South Korea Resolves to Delay the Crypto Tax Code

The ruling Democratic Party of Korea (DPK) has resolved to delay imposing taxes on gains from cryptocurrency transactions. The DPK reached a verdict to reschedule the timing for another year than earlier planned. South Korean politician Hong Nam-ki affirms that the crypto tax code will start soon.

The majority Democratic Party has been aiming to postpone it to 2023. This development comes ahead of the presidential election next year. It is targeting a voter base under 30 years who have invested heavily in the digital asset.

The Ministry of Economic and Finance could protest the party platform on the grounds of defeating policy consistency. The political push has support from the unified stance of ruling party lawmakers. Their popularity is rapidly declining. The lawmakers are infamous due to some government policy failures involving real estate.

Implementing Cryptocurrency Taxation Laws

Recently Noh Woong-rae, said that the Ministry of finance lacks a good structure. Thus implementing the taxing procedure was not feasible. As such, delaying the action seems “unpreventable:”

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Woong-rae added that the Ministry of Finance’s policy of enforcing taxation over crypto endeavors could not proceed as expected. He further expounded that it is hard to secure the proper taxing of overseas operations with crypto transactions.

Crypto Taxation

The tax code will levy a 20% tax on income generated by crypto transactions that exceed 2.5 million Korean won. The authorities postponed this enforcement for three months since early October due to a lack of taxation infrastructure.

Rep.Yoo Dong-soo believes the Ministry of finance should raise the maximum deductible amount from crypto trading to 50 million won. The figure is the same amount that holders receive in financial assets. It includes stocks and funds with over 60% of their investment in stocks.

On Sept. 13, he said that the legal definition of the digital asset will determine the tax amount. He noted that the difference in the amount deductible between 50 and 2.5 million is significant to many investors.

The majority of the Korean population approve the crypto taxation while the country’s authorities have their doubts. For example, 50% of the population support South Korea’s plans to slam 20% tax on gains made from digital asset trading.

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However, almost 40% are against it. Breaking the results into generations, older people are more open to the idea. Virtually half of the people aged between 20 and 29 opposed the incoming law. Still, one fascinating thing is that female Koreans support the taxation rules more than men.