The South Korean government has officially postponed a new tax system for cryptocurrency profits to 2022.
According to Yonhap, the Planning and Finance Committee of the South Korean National Assembly passed changes to the country’s tax laws on December 1, according to which a new tax regime for cryptocurrencies will come into effect in January 2022.
On November 25, lawmakers proposed postponing the introduction of an income tax rule for cryptocurrencies to January 1, 2022 instead of October 2021.
The decision will give local crypto companies more time to adapt to new tax laws. The recently passed changes require investors in South Korea to pay a 20% tax rate on crypto trading profits over 2.5 million won ($ 2,260) per year. The Korean authorities first set the tax rate in July 2020.
The postponement of a new crypto tax in South Korea is a response to the efforts of local cryptocurrency advocates. In October, the Korea Blockchain Association asked the government to postpone the implementation of its new tax framework until 2023. The association didn’t specifically state that it was violating the 20% tax rate, but it said that local crypto businesses need a reasonable amount of time to prepare for laws.