• Sun. Aug 14th, 2022

Cryptocurrencies will no longer be taxed in South Korea for the next two years ⋆ ZyCrypto

ByHazel R. Lang

Jul 21, 2022

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The South Korean authorities have postponed the implementation of their cryptocurrency taxation system for another two years. The government cited the devastating conditions that have plagued the markets lately as one of the reasons, further pointing to the preparatory period needed to fully adopt appropriate investor protection measures in the crypto space as the second reason.

South Koreans would see tax-free gains on crypto until January 1, 2025

The “Tax Reform Bill 2022”, which was due to come into force on January 1, 2023, has been put on hold by the government, as local media reported. This implies that gains from investments in virtual assets would remain tax-free for South Korean residents for another two years, starting January 1, 2023. Accordingly, the bill will be implemented on January 1. 2025.

South Korea’s National Assembly passed the tax reform bill on December 2, 2021. Additional measures were incorporated into the bill on three different dates during the same month, and the bill was to enter into force on January 1, 2022.

However, in mid-January this year, the authorities deemed it necessary to postpone the enactment of the bill for a year from the date it was originally due to come into force. Therefore, investors were instead expecting taxes on crypto gains starting January 1, 2023. With these recent additional deferral reports, investors have another two years of tax-free crypto investments.

Terra crash made investor protection measures a necessity in South Korea

The South Korean government did not take Terra’s collapse lightly, considering that Terra CEO Do Kwon is a South Korean national. Following the crash of the crypto entity which saw investors lose their fortunes, the government decided to put measures in place to ensure that a similar event does not happen again.

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On June 1, South Korean authorities revealed plans to form a “digital assets committee,” which would oversee the crypto markets. The committee would oversee the listing of coins on exchanges, monitor unfair transactions, and enact investor protection measures.

These measures are especially necessary because the rate of adoption of crypto in South Korea has increased enormously over the years. NFTs are particularly popular with South Koreans. In terms of crypto adoption rate, South Korea ranks 16th in the world. Earlier this year, the South Korean government announced plans to pledge $187 million to help Metaverse grow in the country.


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