South Korea to delay new tax regime on cryptocurrencies until 2022

Published at: Dec. 1, 2020

The South Korean government has officially postponed a new tax regime on cryptocurrency gains until 2022.

According to Yonhap on Dec. 1, the planning and finance committee of South Korea’s national assembly passed amendments to the country’s tax laws wherein a new cryptocurrency tax regime will come into effect in January 2022.

On Nov. 25, the legislature suggested delaying the adoption of a cryptocurrency income tax rule to Jan. 1, 2022 instead of October 2021.

The decision will provide local crypto businesses with more time to adapt to new tax laws. The newly passed amendments stipulate that investors in South Korea pay a 20% tax rate on crypto trading gains above 2.5 million won ($2,260) per year. Korean authorities first finalized the tax rate in July 2020.

The postponement of a new crypto tax in South Korea comes in response to the efforts of local cryptocurrency advocates. In October, the Korea Blockchain Association requested the government to delay the implementation of its new tax framework until 2023. The association did not explicitly state it was against the 20% tax rate, but said that local crypto companies need a reasonable period of time to prepare for laws.

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