South Korea Defers Crypto Tax Until 2027 Cites Further Discussions Necessary

South Korea Defers Crypto Tax Until 2027 Cites Further Discussions Necessary

South Korea is postponing the enforcement of the crypto tax policy by two years to allow institutional refinement. 

The Democratic Party of Korea (DPK) floor leader, Park Chan-dae, revealed the decision to delay the crypto tax policy for 24 months in a press conference held at the National Assembly. The move to postpone the policy implementation follows extensive deliberations that the legislator considers necessary to overhaul the regulation of the virtual asset. 

The decision to postpone the crypto taxation for the second time coincides with the political tensions and heightened market volatility witnessed in the week.

Virtual Asset Taxation Deferred

The centrist-liberal party confirmed that the digital asset tax was scheduled for implementation in 2025 would be deferred. The party hailed the decision as essential since the regulatory framework needs amendments to guarantee systematic taxation. 

The announcement coincided with the legislature debates on several supplementary budget bills. Eight of the 13 draft bills were classified as ready for immediate processing in the subsequent plenary session. 

The remaining five bills were marked as facing further deliberation. The party noted that the inheritance and gift tax proposal encountered rejection, with opponents citing its focus on the clause lowering the top inheritance tax rate.

The party affirmed its stance to oppose the policy by the Sought Korea government to tax the dividend income separately. Park elaborated that the proposal disproportionately favors the wealthy. The legislator acknowledged that the ruling and opposition parties are in discussions with the National Assembly Speaker overseeing the last-minute negotiations.

Price Fluctuations Emerge Amid Political Developments

It is worth noting that the recent political events in South Korea caused significant ramifications for the digital assets market. The price slump witnessed early this month is attributed to the martial law announcement. It affected prices against the Won for the crypto assets listed on the Upbit exchange.

Reflecting on the events reveals Bitcoin’s brief stumble to 88,266,000 Won, translating to $66,000. It traded at the discounted price relative to the price in other exchanges. 

The political development eroded XRP value as it plunged to 1,623 won ($1.16) only to reclaim the 3,412 won ($2.4). Despite the recovery, it still traded below the global market price.  

The crypto fluctuations correlated with the disruptions witnessed in the broader financial markets. With stocks and bonds affected, it portrays the martial law declaration led to more uncertainty, given its last use was in the 1980s during President Yoon Yeol’s tenure.  

Turkey Freezes Crypto Gains Tax

The move by South Korea mirrors the initiative undertaken by Turkey to defer taxation on crypto and stock profits. The September initiative yielded a reprieve for investors in crypto and stock markets. 

Turkey’s vice president, Cevdet Yilmaz, affirmed the decision to drop taxing digital assets and stock gains from the government’s agenda. The decision emerged after discussions that focused on refined tax policies, especially to reduce the exemptions. 

Crypto Tax Exemptions in Czech Republic

The crypto tax policy is witnessing increased scrutiny globally, besides South Korea. Such is the case in Czech, where Prime Minister Petr Fiala confirmed the exemption of reporting crypto transactions below $4,200 annually. 

The Dec. 6 post on X by Fiala indicated that residents would not pay taxes for gains in digital assets held for over three years. The newly approved legislation shelves taxation on crypto gains. 

Czech legislator Jan Skopeček confirmed the approval of the time and value conditions by the Chamber of Deputies following the Friday, Dec. 6 reading.

During the press conference, the lawmaker indicated that tax amendments intend to align Czech rules to Europe’s Markets in the Crypto-Assets (MiCA) framework. The spokesperson hailed the bold step to facilitate functioning and sustain the development of the crypto business in the country. 

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