There will be no 20% tax on crypto profits under the amount of 2.5 million won ($1,942.20) until January 20, 2025, the South Korea government stated Thursday, citing “the absence of an investor safety framework” as the reason for delaying taxes. Taxes are levied on revenue from the transfer or lending of cryptocurrency assets.
An article in a local media outlet said that the 20% tax was scheduled to go into force beginning in January 2023. As a result of the May Terra (LUNA) blockchain drama, the government has postponed its decision for two more years.
Additionally, the administration cited unpredictable market circumstances as a major factor in the delay. By 2025, according to a study, the Korean government plans to put in place a comprehensive regulatory framework to defend consumers’ rights.
The 2022 tax change, which was scheduled to take effect next year, would allow Korean investors to claim a 20% income tax on digital asset gains of up to $1,942.
In addition, South Korea imposed an additional 20% tax on earnings that exceeded the stipulated maximum for the year. The implementation of this extra tax will proceed as planned.
Withholding taxes of 11 percent and 22 percent of net capital gains on earnings produced from the sale of cryptocurrencies by a foreign person or corporation are also included in the new law.
A new tax law empowers authorities to look into the validity of tax exemptions claimed under the terms of a tax treaty for income derived from non-residents in part by investigating taxpayers based on tax treaty exclusions.
It was intimated by the South Korean government that it would enforce the “Digital Asset Framework Act,” which was put in place to supervise the virtual asset rights company in 2025 when the tax was introduced. A regulatory strategy for virtual currencies is expected to be in place by the end of the month, according to officials.
The government is going to build up a framework for crypto exchanges operating inside its jurisdiction, as previously reported in June, to avoid what occurred with Terraform from happening again.
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