South Korean government to delay crypto tax rules by three months

Following lobbying by the Korean Blockchain Association, crypto exchanges have extra time to implement a new tax infrastructure.

The South Korean National Assembly is planning to delay the implementation of new income tax laws on cryptocurrency gains following appeals from industry bodies.

According to a Nov. 25 report on Korean-language news site DongA, the 20% tax, originally due to be imposed from October 2021, will now not come into force until Jan. 1, 2022.

The delay is intended to give digital currency exchanges time to implement the changes required to incorporate the new tax infrastructure.

As Cointelegraph reported, the new tax structure for cryptocurrencies was announced in July this year and amounts to a 20% tax on any gains over a threshold level of 2.5 million won ($2,260) per year.

The rules were originally planned to come into force on Oct. 1, 2021, which led to complaints from the Korean Blockchain Association.

The KBA claimed that the short window between the existing tax regulations ceasing to apply on Sept. 30, 2021 and the new regime coming into force the very next day would be difficult for exchanges to comply with, initially requesting a delay until Jan. 1, 2023.

The government seems to have acquiesced to some degree, although it only agreed to an extension of three months rather than the 15 months requested.

Prior to the introduction of the new legislation, digital assets have been treated as currencies and so have not attracted taxation.