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South Korea may postpone the introduction of income tax on cryptocurrencies

South Korea may postpone the introduction of income tax on cryptocurrencies

A committee of the National Assembly of South Korea has proposed delaying the introduction of an income tax on cryptocurrency activities until January 2022.

In January 2020, South Korean authorities began drafting new legislation that requires individuals to pay a 20% tax if their profits from cryptocurrency trading amount to more than 2.5 million Korean won (about $2,000).

Initially, it was planned that the amendments would come into force from October 2021. However, the National Assembly proposed to postpone the introduction of the income tax until at least January 2022. This is due to the fact that local cryptocurrency exchanges will not have enough time to create a proper infrastructure for filing tax reports.

Recall that at the end of last year, the South Korean Tax Service (NTS) collected 80.3 billion won (about $70 million) from the Bithumb exchange, accusing the platform of not withholding taxes from foreign customers for profits from transactions made on the exchange. Bithumb later sued NTS for unfair tax collection, as cryptocurrencies had no official status in the country at the time.

In March of this year, the South Korean parliament approved a bill on the legalization of cryptocurrencies, which will come into force in March next year. According to the bill, platforms for trading cryptocurrencies must fill out reports by September 2021, indicating the real names of the owners of deposit accounts. The National Assembly of South Korea believes that six months will not be enough for this. A decision on this issue will be made next week.