Changes aimed at delaying the introduction of a tax on virtual assets such as cryptocurrencies in South Korea were approved by a large parliamentary committee. The bill aims to delay Seoul’s plan to impose a 20% tax on profits from cryptographic transactions.
Ahead of elections, major parties return to tax exemption for cryptographic investors in South Korea
South Korea’s parliament is taking steps to suspend a planned tax on earnings from investments in digital assets for another year. The measure was supported by the ruling Democratic Party, despite disagreements with the government itself, and also by the main opposition party, the Popular Power Party.
The amendments, which also provide for an increase in the capital gains tax exemption for home sales amid rising home prices, are seen by Korean politicians as a popular proposition. Upcoming presidential elections in March next year, the Korea Joongang Daily newspaper noted in a report.
The National Assembly’s Finance and Strategy Committee approved changes to the respective provisions at a meeting on Tuesday. The vote followed approval of the revisions by its tax subcommittee at a Monday meeting.
Authorities need more time to implement a tax system for cryptographic assets
The two Korean parties have agreed to defer the adoption of a 20% tax on annual earnings from investments in virtual assets in excess of 2.5 million won (US$2,102). The government planned to introduce the tax on January 1, 2022, but a recent vote indicates that the tax should be suspended until 2023.
The Democratic Party insists that investments in cryptocurrencies have become very popular with young voters, who are also struggling to save enough money to buy a home amid high home prices. The party also hopes that raising the capital gains tax exemption for owners of single-family homes sold from a price of 900 million won to 1.2 billion won ($1 million) will help increase the availability of homes. in the market.
DP representatives argued that Korean tax authorities need more time to establish an appropriate tax system for investing in virtual assets. However, Finance Minister Hong Nam-ki opposed the postponement, saying that “the government is ready to immediately tax virtual assets”. However, he noted that the executive branch will abide by any decision by parliament, which is expected to vote on the amendments in early December.