With the popularity of cryptocurrency trading, governments around the world have begun to regulate the decentralized investment products. The South Korean government announced in July that it would postpone the “2020 Tax Law Amendment” until 2025, and 20% of the encryption tax will be postponed.
1.The 2020 Tax Law Amendment Act has been postponed again
With the increasing popularity of “intangible assets” such as cryptocurrencies, South Korea has led to various illegal activities such as illegal financing and fraud, causing potential risks to the local financial system. The South Korean government then promulgated the 2020 Tax Law Amendment in July 2021 for cryptocurrency investors. But according to media reports, the bill, originally scheduled to be implemented in October 2021, will be postponed to January 2025.
The “2020 Tax Law Amendment” is mainly regulated by people who profit from the cryptocurrency market. If investors earn more than 2.5 million won (approximately HK$14,987.59), they must pay a 20% “capital gains tax”. However, if the income in cryptocurrency is less than 2.5 million won in one year, it will not be taxed. As soon as the bill came out, it attracted opposition from the Korean blockchain association and industry, and local economists feared that it would stifle the development of the encryption industry.