South Korea proposes pushing back crypto gains taxation to 2028

South Korea's right-wing political party has proposed delaying the taxation of cryptocurrency gains by three years. If passed, the country’s crypto gains taxation will be pushed back from the beginning of 2025 to 2028.

“As at the moment, the investor sentiment for crypto is negative, most investors are expected to leave the market if the country imposes an income tax on an asset that has higher risks than stocks,” the bill’s description on the South Korean National Assembly’s website said. The bill was proposed last Friday.

A 20% taxation on crypto gains was initially scheduled to take effect on Jan. 1, 2022, but has been pushed back twice so far to Jan. 1, 2025, due to heavy backlash from investors and industry experts. 

South Korea’s right-wing People Power Party, in which current President Yoon Suk-yeol is based, pledged in the last general election to push back the crypto gains tax. 

According to local news reports, the country’s Ministry of Economy and Finance said it has not made a decision on additional delays in the crypto tax. The ministry is scheduled to announce new amendments to the tax code at the end of this month.

The country hosts one of the world’s largest and most active cryptocurrency markets. Around 6.5 million citizens, which accounts for 12.5% of the country’s population, used crypto as of the end of last year, according to the Financial Services Commission. The Korean won was the most-used fiat currency for crypto trading over the U.S. dollar in the first quarter of 2024, Kaiko data showed.