South Korea Postpones Plans to Tax Crypto until 2023

CoinDesk Korea reported at a plenary session on Thursday that South Korean lawmakers had delayed their taxation plan for virtual assets to 2023.

• The proposed tax is to impose a 20% tax on cryptocurrency profits in excess of 2.5 million won (the US $2,122) in the year beginning January 1, 2022.
• Lawmakers from the ruling and opposition parties are trying to appeal to the voters. Local analysts said there are people in their 20s and 30s who are opposed to the tax proposal as they are more likely to become crypto investors ahead of the March presidential election.
• Harold Kim, director of the Korea Blockchain Association (KBA), told CoinDesk that you can often see resistance from industry and investors to the tax plan. But it's "not often" to see lawmakers and financial authorities arguing over the proposed tax and eventually putting off plans.
• Many cryptocurrency investors and  KBA representatives compared the planned cryptocurrency income tax to the tax on stocks and concluded that they were being treated unfairly.
• According to Kim, equity investors only pay tax on profits in excess of 50 million won ($42,450), while cryptocurrency investors must achieve a capital gain of $2,122 to start paying taxes. Additionally, investors can carry forward losses in stocks for 5 years, but not losses in cryptocurrencies at all. Also, according to the KBA director, the tax on virtual assets should come into effect one year before the tax on stock gains.