Deferring the Taxation on Cryptocurrencies Following the Financial Investment Tax Exemption.

With the Democratic Party of Korea supporting the abolition of the financial investment income tax, the taxation of crypto assets related to it is likely to be delayed until 2027 or later. The government has already submitted a bill to amend the Income Tax Act to delay the taxation of virtual assets until 2027, and the ruling and opposition parties will discuss it at the Taxation Subcommittee of the National Assembly’s Strategy and Finance Committee on Nov 14, 2024.

If the current bill is not passed by the end of the year, a 22% tax rate will be applied to profits in excess of 2.5 million won starting next year, but the industry is expecting the taxation point to be further deferred beyond 2027 or the basic deduction to be significantly increased. The Democratic Party of South Korea seems to be feeling the pressure to introduce new taxation, especially as more investors have profited from the recent surge in cryptocurrency prices.

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