South Korea Considers Extending Crypto Tax Delay to 2027

The People Power Party in South Korea is suggesting a further delay to the start of cryptocurrency investment gains taxation, now looking at a potential 2027 kickoff. This proposal is a strategic part of their campaign for the upcoming general election in April, indicating a focus on establishing a solid regulatory framework for cryptocurrencies before implementing taxation. The party’s approach includes the introduction of new regulations targeting crypto custody providers and the criteria for token listings, set to enhance the initial crypto regulations coming into effect in July.

This delay, initially planned for January 2023 and then pushed to January 2025, underlines the party’s intent to develop a well-structured regulatory environment for cryptocurrencies. They aim to finalize their main election promises by the end of this month, showing a clear commitment to addressing the complexities of cryptocurrency regulation and taxation.

Last month, a representative from the Ministry of Economy and Finance hinted at legislative discussions concerning the elimination of income tax on crypto assets. This is part of a larger effort to reduce taxes on financial investments, such as stocks and funds, although the People Power Party has indicated it does not favor completely removing crypto taxes. Instead, they are advocating for a tax threshold for cryptocurrencies that matches that of stocks, proposing a fairer taxation system. Currently, crypto gains above 2.5 million Korean won ($1,875) face a 22% tax, while stock gains are taxed only after exceeding 50 million won.

Additionally, South Korea has announced a policy requiring senior public officials to declare their cryptocurrency holdings from the next year. This move aims to prevent conflicts of interest and maintain high ethical standards within the government.