South Korea’s Democratic Party agrees to delay crypto tax by 2 years

South Korea's Democratic Party Delays Crypto Tax Implementation

In a press conference on December 1, the Korea Democratic Party (KDP) floor leader, Park Chan-dae, announced a two-year delay in the implementation of a tax on digital asset capital gains in South Korea. The tax was originally scheduled to take effect in January 2023 but will now be deferred to 2027.

The KDP had previously opposed the government's proposal for a two-year grace period and the ruling People's Power Party (PPP)'s proposal for a three-year grace period. However, the party agreed to a compromise in order to avoid further delays in the implementation of the tax.

The government had originally proposed taxing crypto gains at a rate of 20%. The KDP had suggested increasing the tax threshold from $1,800 to $36,000, arguing that this would only affect large investors.

The delay in the implementation of the crypto tax comes after years of debate in South Korea. The government first proposed taxing crypto gains in 2021, but backlash from the crypto industry led to the implementation being postponed until 2023. The tax was then further postponed to 2025, citing concerns for investor interests.