South Korea’s Democratic Party is pushing forward with its plan to tax crypto gains at the start of 2025, but is also offering to increase the threshold for taxable gains.
On Nov. 20, local media outlet Seoul Shinmun Daily reported that the Korea Democratic Party (KDP) had challenged the People’s Power Party’s (PPP) plan to delay crypto tax to 2028.
PPP, the country’s ruling political party, proposed on July 12 to delay the taxation of crypto gains to 2028. The KDP said that the PPP’s crypto tax deferral plan was a political trick that they aimed to re-use in future elections.
Increasing the threshold from $1,800 to $36,000
The KDP is pushing to implement the crypto gains tax in 2025, though it’s willing to raise the threshold for taxable crypto capital gains.
In the original tax plan, crypto investors were to pay a 20% annual crypto gains tax on profits of more than 2.5 million won ($1,800). However, the plan received backlash from stakeholders and crypto investors.
The KDP has offered a new plan to raise the tax threshold to gains exceeding 50 million won (about $36,000), similar to the country’s policy on stocks.
The KDP said that raising the threshold for taxable gains is similar to abolishing the crypto tax. There would be little tax effect since only a few investors make more than $36,000 in profit from their crypto investments.
The party said that with the new threshold, only big players will be hit with the crypto gains tax.
Related: South Korean city threatens to sell crypto of tax debtors
Crypto taxation delay in South Korea
South Korea’s capital gains tax on crypto was initially scheduled to be implemented in 2021, but the backlash from crypto stakeholders and industry leaders led the government to delay the implementation to 2023.
After politicians recognized investor concerns, it was postponed to Jan. 1, 2025. Still, if the KDP and the ruling party agree, the 20% capital gains tax may be implemented next year.
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