Despite Finance Ministry's Objection
The Strategy and Finance Committee of the National Assembly passed an Income Tax Act amendment on Nov. 29. According to the amendment, taxation on capital gains from cryptocurrency transactions will start on Jan. 1, 2023 instead of Jan. 1, 2022. The bill was passed despite the Economy and Finance Ministry’s objection.
The ministry was planning to apply a tax rate of 20 percent to an annual cryptocurrency trading profit of 2.5 million won or more starting from January next year. However, it was pointed out that the taxation is too early with the definition of cryptocurrency still unclear. Both the ruling and opposition parties opted for the postponement in order to win over young voters with the presidential election around the corner.
The final adoption of the amendment is scheduled for Nov. 30. Then, it can be finalized in early December after subcommittee and plenary meetings.