South Korea proposes delay on Crypto Income Tax Rule implementation

Table of Contents

• The crypto bloom
• The delay 
• The Act

South Korea is one of those countries, which decided to finally adopt the cryptos nationwide, though the plans have changed recently, leading to some important discussions and dubious questions. The final adoption of the cryptos in the South Korean market was supposed to happen by the end of the next year, to be more precise in the October of 2021, though the adoption has moved to 2022, without any specific date.

South Korea is one of the fastest-growing and developing countries. While it is extremely traditional and cultural it is very modern as well and the technological booming is just at the peak. Thus, the implementation of the crypto assets would have been the next huge step to the future. And this will happen, though slightly later. 

The importance of the crypto-friendly environment in the country is vital for the tech industry as well as for attracting more foreign investors and making people invest more money in the possibly very lucrative industry. The South Korean government has also a good correlation with the crypto assets, yet the Crypto Income Tax Rule is pushed to 2022. 

The main reason which stands behind the two-year delay is the non-readiness of the local market and local society. The introduction of cryptos is a huge thing, and while the government wants to make the move, it is crucial to wait for people and rate the situation in general properly. 

The crypto bloom

The crypto industry blooms in the country with or without the new income tax rules. The main interest in cryptos is for trading purposes and of course for making money. The cryptos have several major perks and benefits, which is a decentralized currency and the easiness as well as the safety of the information and the transaction. This is why many people want to make the best and the most out of it. 

South Koreans are very eager to find a new activity, which has a big potential and one of them is trading. The forex market is popular, though the country still has some problems with the unregulated brokers. The governments have been struggling to tackle the unlicensed foreign brokers for some time, and have banned some of them. People are attracted to the market and shall use crypto as another great opportunity to trade. According to the Oinvest review, the local population has already traded a lot with cryptos, and once the income tax rule is implemented, the charge for South Korean residents should be 20% income tax on cryptocurrency gains worth more than 2.5 million won, or around $2000.

Even if this happens, and everyone is happy in the end, the government should establish a healthy relationship with the local and international brokers, who hold a significant part of the financial market, approaching them with the licenses and offering the ability to trade within the law framework. 

The delay 

As Korea's National Assembly proposed a delay in the crypto tax rule to push the implementation to January 2022, not everyone was very happy about the change. The planning and finance committee has outlined factors such as timing and management of the law and documents, which need to be completed and fulfilled until the law comes into force. 

The report has also been published stating by the DONG-A ILBO, which is one of the biggest media outlets in the country, the assembly, and certain committees are pushing for the delay because the crypto exchange operating in the country require more time an effective taxation infrastructure,e up until the moment of the law enforcement come.s Everyone thought that the deadline was realistic, yet with all of the current situation and the crisis all over the world, some things have changed in priorities and in the queue. 

The report states that the South Korean Congress is worried about the fact that the crypto industry is not ready to implement such changes in a short time. In addition to the crypto income tax rule, exchanges need to enforce the ‘Special Financial Information Act’ by next year.

The Act

The report mentions that some of the committees and representatives are worried about the fact that the crypto exchanges are running out of time.  Under the “Specific Financial Information Act”, the exchanges must complete a reporting system by September 2021, to complete the KYC of clients in order to show verified names of deposit and withdrawal accounts. And some investors are not happy about the changes proposed by the government at all. 

Part of investors believe that it is really good to implement it quickly and that young person will be having a great opportunity with the new crypto initiatives, but from the other side, before making such important decisions, everyone should be heard and the security, safety, and sympathy towards the industry should be considered nonetheless.