On Tuesday, the newly elected president of South Korea, Yoon Seok-yeol, announced that he would push to postpone crypto investment gains taxation until the Digital Asset Basic Act, a new regulation set, is enacted. However, the crypto tax in South Korea was initially decided to come out into effect by this ongoing fiscal year, but it got a push back till 2023 last December. As reports stated, Yoon has thought to ensure that until reasonable legislation takes place for consumer protection, the law on crypto tax does not come into effect, which is expected to go by 2024.
South Korea’s president-elect has a presidential transition team working towards and exploring the available options to delay the crypto tax since March. It was the same time when Yoon came into power by winning the election, and his team delayed the taxes on the basis that the legislation was insufficient in place to justify imposing the taxes on digital assets.
Though DABA has come up with the Financial Service Commission this year and is following a series of laws that are related to consumer protections. The act belonged to the issuance of tokens, nonfungible tokens, international finance, centralized exchange or CEX listings, etc. It is related to the crypto, including US president Joe Biden’s crypto executive order response.
The FSC plans through DABA to introduce an insurance system with crypto as a supporting measure against hacks, unauthorized transactions, and system errors. The crypto tax legislation, which remained controversial for very long, has been delayed again, which would impose about 20% tax on the gains over the crypto investments that account for above $2,100 per year in profit.
On Tuesday, a representative from FSC said that taxing the investment income from crypto-assets should be done once the legislation regarding investor protections is in place. CEO of Hashed, a prominent crypto venture capital firm in South Korea, Simon Kim, agreed and said that it does not make sense to impose taxes on cryptocurrency without enacting the relevant statutes that state the scope of crypto-related businesses is vital for taxation.
He said that without profound research about the industry and robustly implementing the strategy, raising several serious issues in taxation equity, considering an investor protection system for digital assets and promoting taxation on cryptocurrency can cause various accidents that have yet to be implemented.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.