- South Korea is delaying virtual asset tax implementation until 2025, counting the third postponement since its proposal in 2020.
- The opposition Democratic Party pushes for a higher tax exemption threshold, aligning it with stock income taxation standards.
- Supplementary budget discussions continue, with key bills under review and mediation possible to resolve disputes between parties.
South Korea’s largest opposition party, the Democratic Party of Korea, has announced its terms with the government and ruling party to delay the implementation of a virtual asset tax by two years. The announcement was made on December 1 by Park Chan-dae, the Democratic Party’s floor leader, during a press conference at the National Assembly in Yeouido, Seoul marking the third time South Korea has postponed the introduction of taxation on virtual assets.
South Korea Pushes Virtual Assets Pause
Park Chan-dae explained that the decision followed in-depth discussions regarding tax exemptions on virtual assets. He emphasized the need for an additional institutional overhaul to ensure a more robust framework for virtual asset taxation. This deferral is seen as a step toward restructuring the system to better align with the fast-evolving digital asset landscape.
The announcement comes after South Korea’s ruling and opposition parties pro longed clash over the implementation of a proposed 20% tax on digital asset profits. The ruling People Power Party (PPP) has called for another delay, citing the need to prepare investors, while the opposition Democratic Party (DP) demands adherence to the January 2025 schedule with a higher tax exemption threshold.
The tax, initially proposed in 2020, has already faced two delays due to investor backlash. While the PPP suggests pushing implementation to 2028, DP lawmakers want the threshold raised from KRW 2.5 million to KRW 50 million to align with stock income taxation. Deliberations remain unresolved.
Budget Bills Debate: Five Proposals Await Final Decision
Speaking further about the supplementary budget bills under consideration, Park confirmed that the government had submitted 13 proposals. Of these, eight bills, with no contention between the ruling and opposition parties, are set to be processed in the upcoming plenary session. Discussions on the remaining five bills are ongoing, with a decision expected by the end of the session.
Park also noted that some proposals, including the inheritance and gift tax bill, are likely to be rejected. He reiterated that discussions between floor leaders of both ruling and opposition parties could continue under the National Assembly Speaker's mediation if necessary.
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