The South Korean government announced a big measure for the virtual asset industry. The authority declared that the taxation of cryptocurrency will be postponed for two years.
New Taxation to imply in 2025
As per the report, this step has been taken into consideration in the current situation of the global crypto market. However, it will also buy some time for the government to prepare investor protection measures.
The announced “2022 tax reform bill” mentioned that the government has formed a conclusion to suspend the taxation of virtual digital assets. Meanwhile, this taxation policy was to be implemented from January 1, 2023, for the next two years.
According to the announcement, the new taxation policy will be implied from January 1, 2025. However, the plan is to generate income from the transferring and lending virtual assets platforms. It also mentioned that distinct taxation will be applied at a 20% rate on income. A basic deduction of around 2.5 million won (approx $1910) has been applied.
The report stated that the government is looking after an investor protection system. Investors have suffered a huge loss due to the Luna incident in May 2022. Since then authority has pointed out that some domestic virtual asset exchanges didn’t take certain measures to minimize the investors’ losses.
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Global crypto market down by 2%
The global crypto market registered another drop of around 2.52% after recovering from the recent downturn. The recent collapse was triggered by the fall of Korea based Terra LUNA labs. Around $60 billion was wiped from the market in just a few days. However, the cumulative market cap now stands at $1.03 trillion.
The new 2025 taxation policy will see the “Digital Asset Framework Act”. A virtual asset industry rights corporation might also come into action. Meanwhile, the Korean government is strategizing to start preparing for the legislation in reference to the US virtual asset regulatory report which will be released in October.
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