South Korea’s Democratic Party of Korea (DPK) is pushing to implement the controversial 20% cryptocurrency tax by 2025, countering efforts by the ruling People’s Power Party (PPP) to delay it until 2028.
On Nov. 20, local media reported that the DPK criticized the PPP’s proposal as a “political trick” aimed at influencing future elections.
The DPK remains committed to the tax’s enforcement starting Jan. 1, 2025.
South Korea’s crypto tax plan has faced multiple delays since its introduction. Initially slated for implementation in 2021, the measure was postponed due to strong opposition from industry leaders and investors.
Lawmakers first deferred the tax to 2023, and later to 2025, following continued resistance and public concern.
The proposed tax would impose a 20% levy on cryptocurrency gains exceeding 2.5 million won (approximately $1,800), with an additional 2% local income tax applied to eligible profits.
However, major exchanges like Upbit and Bithumb have criticized the policy, warning it could significantly reduce trading volumes.
An anonymous industry spokesperson cautioned that “many exchanges will probably shut down” if the tax is enforced.
To address these concerns, the DPK has proposed increasing the taxable gains threshold from 2.5 million won to 50 million won (about $36,000).
The party argues this revision would primarily target high-net-worth individuals, leaving the majority of investors unaffected.
Under this framework, South Korea’s crypto tax rules would align more closely with those governing stock investments.
The final decision on the tax’s implementation date and structure will depend on ongoing legislative negotiations between the DPK and PPP.
Crypto taxation in other jurisdictions
Several nations across the globe are introducing and revising tax reforms to regulate the growing sector.
Russia has issued new guidelines that classify cryptocurrencies as taxable property.
Under the regulations, mining income will be taxed based on the tokens’ market value at the time of receipt, with a proposed personal income tax rate of 15%.
Crypto miners will also be allowed to deduct related expenses from their taxable income.
Italy’s government is considering reducing a planned tax hike on crypto trades from 42% to 28%, following concerns that the original rate could harm competitiveness. Executives in the sector urged a reconsideration of the steep increase proposed previously.
Elsewhere, Denmark has proposed taxing unrealized gains and losses on crypto assets at a uniform rate of up to 42%.
The measure would categorize such gains as capital income, adding another layer of taxation for investors.
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