TL; DR Breakdown
- South Korean lawmakers to delay crypto tax till 2023
- Lawmakers want a defined structure for the tax
- The committee wants the government to define crypto
With most countries now seeing the light and accepting that digital assets are here to stay, they are now looking to generate income from them. Countries worldwide are now developing regulations for the crypto sector while mandating them to pay crypto tax on their gains. Following the steps of these countries, South Korea announced that crypto traders in the country would be subjected to crypto tax. However, a recent update looks like that decree might be pushed forward until 2023.
Lawmakers say the procedure for the system is not clear
According to the recent update, lawmakers in the country are mulling over a decision to shift crypto tax payments until 2023. In a meeting held by legislators and the tax committee of the National Assembly, there is an agreement in place that would settle the issue. If the Parliament passes the bill, which is set to be read on December 2, traders will begin to pay crypto tax in January 2023 against the previous set date of January 2022.
Citing a reason for the move, the lawmakers in the Democratic Party said that the National Tax System failed to implement a straightforward and transparent procedure in gathering information that will be used. For example, the NTS said that if the purchase price of a crypto that has laid dormant in a wallet cannot be priced, such crypto cannot attract tax and would be considered $0. This means that crypto traders who have kept their assets in wallets before the crypto tax legislation face issues. The procedure means they would pay tax for the whole crypto they hold instead of the usual gains.
Committee wants the government to define crypto
The head of the committee, Kim Young-Jin, also mentioned that crypto tax could not be levied on traders until the government decides what asset class it wants to put cryptocurrencies in. He said that the country should first define and regulate digital assets before imposing a crypto tax on the assets. Giving his own opinion, Hong Nam-Ki, South Korea’s finance minister, said that the tax should be equal so that all only all profits made in trading crypto are subject to crypto tax.
In the last few months, Hong has shunned talks about crypto tax at the country’s National Assembly. The failure to clearly define a tax structure for digital assets across the states has put both traders and lawmakers in a state of confusion. Last week, the NTS mentioned that there was no rule in place to tax NFTs. The body also mentioned that it is currently moving to include them in a list of tradable digital assets.
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