Seoul has postponed its crypto gains tax for a fourth time, moving the date to 2029. Hong Kong, meanwhile, passed its own tax reporting law.
South Korea has postponed its long-anticipated crypto gains tax for a fourth time, shifting the planned start to 2029. The levy had originally been scheduled to take effect in January 2027.
The move puts South Korea at odds with Hong Kong, which passed a law on Wednesday introducing its own crypto tax reporting requirements.
The planned tax is a 22% rate on yearly crypto gains exceeding 2.5 million won ($1,870). This rate is composed of a 20% national tax and a 2% local tax.
An investor with 5 million won ($3,730) in gains, for instance, would owe 550,000 won ($410). First unveiled in 2020, the tax was initially slated for 2022. It has been delayed three times since then in the face of investor opposition.
Democratic Party leader Kim Min-seok proposed a further delay on Wednesday. The following day, the government agreed to the request, the Seoul Economic Daily reports.
Finance Minister Lee Hyung-il revealed the decision during an emergency briefing.
“I take it seriously that, after three previous postponements, I am now announcing another deferral,” he said.
The change remains subject to approval from the National Assembly, however. The government has stated it will confer with lawmakers to pursue the two-year deferral.
Officials pointed to several factors. One is that the US will not start exchanging crypto tax information until 2029. Another is the need to refine the tax framework, including introducing loss carryforward deductions.
South Korea is also developing a new digital asset law. BeInCrypto reported that the bill would establish licensing rules for exchanges and stablecoin issuers.
Meanwhile, a joint public-private working group is tasked with drafting detailed tax standards by the first half of 2028. Nonetheless, analysts say falling support from young investors was the deciding factor.
Critics contend that the successive postponements undermine the credibility of the tax system. In contrast, lawmakers in Hong Kong on Wednesday passed a bill that adopts the OECD's Crypto-Asset Reporting Framework.
Under the new law, crypto service providers in Hong Kong are required to start collecting user data in 2027. The city will then begin trading that data with partner jurisdictions from 2028.
Consequently, Asia's two largest crypto economies are currently on quite different tracks when it comes to taxation.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
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