PiCK
Blue House Backs Another Delay to Crypto Income Tax, Citing Youth Opinion and Lack of Readiness
Summary
- The Blue House said it has moved toward postponing the tax on income from virtual assets, or cryptocurrencies, that had been scheduled to take effect next January.
- It said the current income tax law calls for a 22% tax rate, including local income tax, after a 2.5 million won ($1,810) deduction on income from the transfer or lending of virtual assets.
- It said the ruling party is pushing a bill to delay the start of crypto taxation until 2029, and that the government plans to finalize its position after the annual parliamentary audit and consultations with the ruling party.
Forecast Trend Report by Period
South Korea is increasingly likely to delay again a tax on income from virtual assets, or cryptocurrencies, that is scheduled to take effect in January. The Blue House has leaned toward a postponement, with consultations between the government and the ruling party and a parliamentary review of the relevant bill still to come.
News1 reported on October 25 that a Blue House official said implementation would be delayed in part out of respect for younger people’s efforts to build assets. Discussions between the government and the ruling party are expected to proceed in that direction.
Under the current income tax law, annual income from the transfer or lending of virtual assets would be subject to a 22% tax rate, including local income tax, after a 2.5 million won ($1,810) deduction starting next year. The start date has already been postponed three times.
Officials have cited inadequate tax infrastructure and fairness issues involving users of overseas exchanges as reasons for another delay. In particular, concerns have been raised that the tax burden could be concentrated on users of domestic exchanges because the US is set to join the Crypto-Asset Reporting Framework, or CARF, only from 2029.
The biggest obstacle is that the US does not provide South Korea with tax information, the Blue House official said. If the tax is introduced as scheduled, authorities would have to track information on US exchanges one by one.
The ruling party is also pushing a bill to delay the start of crypto taxation until 2029. The Blue House plans to finalize its position after the annual parliamentary audit ends and after consultations with the ruling party.
