South Korea’s Democratic Party (DP) has introduced a bill to raise the crypto tax threshold. This proposal, scheduled to take effect in January 2025, aims to increase the threshold to 50 million won (about $36,000). If passed, it will align crypto traders with stock market investors. Currently, stock investors are not taxed on earnings under a similar threshold.
Crypto Traders and Stock Investors: Parity in Taxation
Under current law, crypto traders must pay taxes on annual earnings above 2.5 million won (around $1,800). The new proposal would provide traders with similar tax treatment to stock investors. This change could reduce the tax burden for both professional and general investors in the crypto space.
Political Support and Opposition
The bill will be presented to the National Assembly’s Planning and Finance Committee on November 26. The DP, which holds a majority in the Assembly, aims to pass the bill quickly. Several parties support this proposal, while others, including some in the ruling People’s Power Party (PPP), advocate for a tax deferral plan instead.
A Compromise Approach
The DP’s proposal offers a compromise. Instead of delaying the crypto tax, the DP has opted to raise the tax threshold. Many lawmakers support this move, while investors have voiced strong opposition to the original tax plan.
Crypto Tax Debate in South Korea
The issue of crypto taxation has been a point of contention in South Korea since 2019. Lawmakers initially voted to implement the tax in 2020, with a planned start in January 2022. However, they delayed the law twice. As of 2024, talks continue about potential delays or changes to the plan.
Looking Ahead
The DP’s proposal will be fast-tracked before the current parliamentary session ends. If it clears the necessary committees, the party hopes to pass the bill before November 26. This debate over crypto tax reform is just one part of South Korea’s broader challenges, including its low fertility rate and aging population.
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