- The taxation of cryptomoney in South Korea can be postponed until January 2022.
- South Korean cryptographic exchanges say they need time to adapt to tax laws.
- The crypto tax laws and real name trading guidelines are major steps in legitimizing cryptomony trading in South Korea.
The South Korean parliament is considering delaying the implementation of its tax laws on cryptomoney until early 2022.
In June, the country’s government announced its intention to introduce a capital gains tax on cryptomony trading from 2021.
The introduction of the crypto tax in South Korea is the latest step in the legitimisation of the sector after a tumultuous two-year period of anti-cryptomony sentiment on the part of the authorities.
Period of adjustment of the tax law on crypto-currencies
According to the online service of the South Korean newspaper Dong-a llbo, the country’s legislators are considering postponing the introduction of their cryptic tax laws until January 2022.
If adopted, the decision would mean an additional three months in the promulgation of South Korea’s cryptos tax regime previously scheduled for October 2021.
The decision to introduce a three-month grace period would be based on consultations with cryptographic exchanges that say they need more time to create appropriate tax reporting protocols on their respective platforms.
A spokesman for the tax sub-committee of the South Korean National Assembly noted that it was necessary to reach some consensus on how to implement the new cryptographic tax regime.
In June, South Korea’s Ministry of Economy and Finance announced its intention to start levying a 20% tax on cryptographic profits above US$2,000. As part of the tax plans, the country’s authorities have also opted to treat cryptoskills under the banner of transferable income like real estate, rather than interest or dividends.
Strengthening the industry
The planned fiscal policy on cryptography is the second major decision related to South Korea’s crypto in 2020. In March, the National Assembly passed regulations that effectively legalized the trade of virtual currency in the country.
Under the laws, all South Korean cryptos exchanges must work with banks to enforce real-name trading accounts. Indeed, the tax reporting rule is also seen as an extension of this anti-anonymous trading policy for cryptomoney in the country.
Currently, only the „Big Four“ cryptos exchanges in South Korea – Bithumb, Upbit, Corbit and Coinone – comply with the real-name trading account rule. Under the new law, exchanges that do not comply will be required to leave the country.
The capital gains tax on cryptomoney generally attracts criticism from some sections of the industry because of the complications involved in reporting many transactions and their volatility.
Exchanges such as Gemini now offer tools that provide real-time cryptos tax services.