South Korea Likely To Postpone Crypto Tax Rule Implementation to 2022
The South Korean authorities have been mulling a cryptocurrency tax rule for a long period of time! As per the latest developments, the planning and finance committee of South Korea’s National Assembly will be reportedly delaying the implementation of the crypto tax rule to January 2022.
It means that the implementation will be moved further by three months from the previous timeline of October 2021. A newly published report by South Korea’s local news publication DONG-A ILBO notes that the delay comes as part of offering more time to crypto exchanges to build an effective taxation infrastructure to adapt with the changes.
Earlier this year in July 2020, South Korea’s Ministry of Economy and Finance had introduced new tax amendments charging residents a flat 20% crypto tax on gains above $2000 or 2.5 million won.
The latest report from the local publication notes that the government is concerned that the crypto industry is not prepared to implement these changes in a short period of time. Furthermore, in addition to the crypto tax rule, exchanges will also need to implement the ‘Special Financial Information Act’ by 2021.
This Act mandates that crypto exchanges need to complete its reporting system by September 2021. Furthermore, they shall complete KYC of all their account holders and must be verified for all the deposits and withdrawals. However, the report mentions that local crypto investors aren’t happy with the proposed changes.
A statement issued by the South Korean Democratic Party wing member notes: “We need to listen fully to the infrastructure and readiness of the (industry). I feel that the young people can react with greatness, and it is good to implement it quickly, but it is important to calmly take on the system while securing a considerable degree of sympathy”.
Earlier this year in March 2020, the South Korean National Assembly passed regulations legalizing virtual currency trading in the country. The legalisation comes with exchanges having to work with banks for enforcing the real-name trading accounts.
Currently, only the big four exchanges in South Korea namely UpBit, Bithumb, Corbit, and Coinone are complying with the rule of real-name trading accounts. Not that any exchanges that fail to adhere to the guidelines post January 2022 with have to either leave the country or discontinue operations.