South Korean Government Suspends Crypto Taxation by Two years
2022.07.22 11:37
South Korean Government Suspends Crypto Taxation by Two years
- The South Korean Authority has suspended its proposed taxation on virtual assets until January 1, 2025.
- The reasons cited include the current market conditions and investor protection.
- The target is income generated by transferring or lending virtual assets.
The Korean government has further shifted the implementation of a tax on cryptocurrency trading for an additional two years, considering the stagnant market conditions. This development came via a report in a Korean news agency, Hankyung, on July 21, 2022.
According to the 2022 tax reform bill cited by the source, the taxation on virtual assets will take effect on January 1, 2025. However, the earlier proposed implementation was from January 1, 2023.
As translated by Google (NASDAQ:GOOGL), the report read:
The target is income generated by transferring or lending virtual assets. Separate taxation is applied at a 20% rate on income to which the basic deduction of 2.5 million won has been applied.
Additionally, the government cited the lack of an investor protection system as the background for the deferral of taxation, also recalling the tragic implosion of Terra LUNA. Terraform Lab’s 1.0 projects, TerraUSD (UST) and TerraLUNA (LUNA) – which collapsed in May putting investors in over $50 billion losses – were the brainchild of two Korean entrepreneurs, Daniel Shin and Do Kwon.
In related news, CoinQura reported on June 28 that the Russian parliament approved a draft law to potentially excuse digital assets and cryptocurrencies from value-added tax (VAT) issuers of digital assets and cryptocurrencies. Under the law, the tax would be 13% for Russian companies and 15% for foreign ones, a reduction from the current 20% rate.
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