South Korea Delays Digital Asset Taxation Framework Again, This Time Caving to Ruling Party

A push to extend the grace period before a new digital asset taxation framework takes effect has received bipartisan support in South Korea.

South Korea, biotech, crypto, Russia, tax

South Korean lawmakers are set to extend the grace period before a new digital asset taxation framework takes effect. The move comes amid political wrangling over the issue, with opposition parties initially pushing for the taxes to be implemented next year.

However, according to the latest reports from South Korea, the opposition Democratic Party (DP) has agreed to another postponement, following pressure from the ruling People Power Party (PPP).

“We have decided to agree to a two-year moratorium on the implementation of the cryptocurrency taxation proposed by the government and ruling party,” DP’s floor leader, Rep. Park Chan-dae, said in a press conference on Sunday, as reported by the local paper Korea Herald.

The opposition party had previously criticized the government for using the delays as a campaign tactic.

“Crypto tax was voted into law four years ago. Its launch has been postponed twice since then. But it is now time to launch the tax for the sake of legal stability,” one of DP’s lawmakers said.

The DP, which controls the National Assembly, had also proposed raising the tax threshold from the proposed $1,800 to $36,000, aligning it with stock market income to further cushion retail traders.

However, the party has now changed its stance, arguing that Korean authorities are not yet fully prepared for the new framework. The party also concluded that the delay could further boost the nascent industry, which has been largely dominated by retail traders, who would have been the most affected by the new tax regime.

Meanwhile, as South Korea continues to grapple with the implementation of the new taxation framework, Russia has moved swiftly in the opposite direction.

Both houses of the Russian parliament have passed a new law that caps the taxes on crypto gains at 15%, aligning them with stock gains, and the legislation was signed into law by President Vladimir Putin days later.

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