South Korea once again delays the imposition of Cryptocurrency tax until 2027

Park Chan-dae, the floor leader of the largest opposition party, the Democratic Party of Korea, announced that he would abandon the plan to implement the Cryptocurrency capital gains tax in 2025 and agreed to postpone it for another two years until 2027. The proposal to “delay the Cryptocurrency capital gains tax” was put forward by the South Korean government and the ruling People Power Party. The Democratic Party of Korea had previously stated that the postponement of taxation was a political tactic of the ruling party. Initially, South Korea planned to impose a 20% tax on cryptocurrency earnings (22% for local taxes), which was scheduled to take effect on January 1, 2022. Due to strong opposition from investors and the industry, the plan has been postponed twice until January 1, 2025. After today’s press conference, the tax collection has been postponed again to 2027. The ruling party, People Power Party, also proposed that the grace period for the encryption capital gains tax of 2 years is not enough and should be extended to 2028. It is not advisable to impose taxes on cryptocurrencies rapidly as investors may leave the market as a result. The People Power Party hopes to postpone the implementation time to 2028 to fulfill its promises during the election period.