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South Korean authorities and the ruling party are considering extending the income tax exemption period for cryptocurrency trading for another 3 years.
If passed, taxes on cryptocurrencies will be postponed to January 2028 instead of January 2025. South Korea’s Ministry of Finance plans to confirm this decision later this month when it announces tax revisions for next year.
On the website of the Korean National Assembly, the draft law released last week emphasized that:
“Investor sentiment towards cryptocurrencies is currently quite negative, with most considering leaving the market if income tax regulations are introduced for this asset, despite its higher risk profile compared to stocks.”
Previously, South Korean financial authorities decided to apply a 20% income tax on cryptocurrency transactions from January 1, 2022, when the value of this transaction exceeds 18 billion USD/day.
According to legal regulations, cryptocurrency investors must pay 20% tax if income from this transaction during the year exceeds 2.5 million won (equivalent to 2,125 USD). This means they must declare cryptocurrency transactions to tax authorities.
Due to the fierce reaction from investors and industry experts, Korea had to adjust the time for applying this tax twice. The first time was moved to 2023 and the most recent time was moved to 2025.
