South Korea delays crypto asset income tax collection originally scheduled to take effect next January.
1 days ago
According to Seoul Economic Daily, South Korea’s presidential office has decided to further delay the implementation of the crypto asset income tax originally scheduled for January next year. A presidential office official said on the 25th that relevant discussions lean toward the delay. South Korea’s government amended the Income Tax Act in 2020 to impose tax on crypto asset gains, but the policy has already been delayed three times. The original plan was for the tax system to take effect on January 1, 2027. Per the revised Income Tax Act, annual income from crypto asset transfers or lending, after deducting a basic exemption of 2.5 million won, is taxed at 22% (combining national and local income taxes). South Korea also took into account that the U.S. will join the Crypto-Asset Reporting Framework (CARF) starting in 2029, leading to the delay. CARF is an international tax information exchange mechanism, under which participating countries’ tax authorities can collect users’ residency and transaction data from crypto asset service providers and exchange such data cross-border. Given that the U.S. is a large crypto trading market and joined the framework late, if South Korea had implemented the tax earlier, it would have resulted in an excessive tax burden falling on users of South Korea’s domestic crypto trading platforms.
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