South Korea’s newly-elected president Yoon Suk-yeol announced Tuesday he would push to defer taxation on crypto investment gains at least until a new set of regulations called the Digital Asset Basic Act (DABA) is enacted.
South Korea’s crypto tax was initially set to come into effect for the 2022 fiscal year but was pushed back to 2023 last December. E-daily reported that Yoon will ensure the crypto tax law does not come into effect until reasonable legislation is in place to protect consumers, which could be by 2024.
The president-elect’s presidential transition team has been exploring its options in delaying the tax since March, when Yoon won the election on the grounds that there was insufficient legislation in place to justify levying taxes on digital assets.
DABA was conceived by the Financial Services Commission (FSC) this year and entails a series of laws related to consumer protections. The act pertains to token issuances, nonfungible tokens (NFT), centralized exchange (CEX) listings, international finance as it relates to crypto and includes a response to United States President Joe Biden’s executive order on crypto.
Through DABA, the FSC plans on introducing a crypto-insurance system as a backstop measure against hacks, system errors and unauthorized transactions.
The controversial crypto tax legislation that has been delayed yet again would levy a 20% tax on crypto investment gains above about $2,100 per year.
On Tuesday, an FSC representative told e-daily that “taxation of investment income from virtual assets should be done after investor protections…