After going radio silent, South Korea is looking to revise its crypto tax policy amid a growing trend in the broader market
South Korea’s ruling Democratic Party (DPK) will start a new cryptocurrency tax policy in January 2025. According to the report, this policy will impose a 20% tax on gains from cryptocurrency. Initially scheduled for 2022, the tax faced delays due to strong opposition from investors. However, the DPK plans to finalize the policy with essential changes to address previous concerns.
Shift in Crypto Tax Framework
The updated tax rules will now allow for a higher exemption on taxable gains from cryptocurrency. Previously, gains under 2.5 million Korean won ($1,795) were exempt from taxes. Under the new plan, this limit has increased to 50 million won ($35,919). This change aims to reduce the tax burden on small and medium-scale investors, providing relief for those who trade moderately.
Also, the change addresses the issue of figuring out the original purchase price of cryptocurrencies, which investors often find challenging. The updated policy allows taxpayers to use a percentage of the sale price as the acquisition cost estimate when they do not have exact transaction records. This change makes things easier for taxpayers and reduces valuation disputes.
Furthermore, the DPK has set an explicit schedule for approving the revised policy. The National Assembly’s tax subcommittee will vote on the proposal on November 25. After that, the entire legislature will review and possibly approve it during their general meeting on November 26. If the proposal passes, it will be an essential step toward regulating and taxing South Korea’s growing cryptocurrency market.
Recall that the Italian tax authority said it would increase the capital gains tax on Bitcoin (BTC) and other cryptocurrencies to 42%. According to the news, the move is part of the 2025 budget proposal plan.
Rethinking South Korea’s Crypto Exchange Monopolies
Meanwhile, South Korean lawmakers have pushed for a ban lift on cryptocurrency Exchange-Traded Funds (ETFs). According to BGECrypto news, South Korea’s top financial watchdog, the Financial Services Commission (FSC), has re-evaluated its stance on crypto ETFs and institutional crypto accounts. This comes as legislators’ pressure mounts amid growing global interest in the digital asset class.
This decision could reshape South Korea’s approach to digital assets in traditional financial markets. In addition to reviewing the ban on crypto ETFs, FSC Chairman Kim Byung-hwan addressed concerns regarding South Korea’s digital asset exchanges. One of South Korea’s five fully licensed exchanges, Upbit handles more than 61% of the country’s total crypto trade volume, surpassing $1.17 billion in daily transactions.Â
This monopolistic structure has ignited concerns about market fairness and stability. Kim vowed to investigate the concentration of power in South Korean exchanges.
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