South Korea Postponed Taxation of Cryptocurrencies until 2022
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South Korea postponed taxation of cryptocurrencies until 2022
The Planning and Finance Committee of the South Korean National Assembly has proposed to postpone the introduction of income tax on cryptocurrency transactions until January 2022. This is reported by local media.
Why have the dates changed?
The authorities originally planned to introduce the tax in October 2021. The parliamentarians explain the change in terms of the fact that cryptocurrency exchanges need more time to create an effective tax infrastructure.
The Korean Blockchain Association, a coalition of South Korean cryptocurrency companies, criticized the timing of the transition to the new legislation and requested a delay until January 1, 2023. Parliament agreed to extend the term by three months, rather than 15 months.
Further actions on crypto exchanges in South Korea
Now the exchanges are obliged to complete KYC procedures for clients in the framework of the implementation of the law “On Special Payments” by September 2021. Some investors have already expressed dissatisfaction with the government’s initiatives to regulate the crypto market.
Recall that the South Korean government’s plans to tax capital gains for transactions with cryptocurrencies became known in December 2019. The rate was assumed to be 20%.
Previously, digital assets in South Korea were treated as currencies and were not taxed. With the introduction of new legislation, virtual assets will be classified as goods for which transactions are made for the purpose of sale.
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