It looks like there will be a fourth delay to the controversial crypto tax in South Korea, which could mean another two years before the country's crypto investors will have to start paying taxes on the profits from their digital asset investments.
As reported by local media, the country's presidential office is leaning towards a delay in the introduction of the country's crypto tax. The tax is currently set to take effect on Jan. 1, 2027.
The tax proposes to tax annual crypto profits above 2.5 million won (around $1,888) at a rate of 22%, which includes a 20% income tax and an extra 2% local tax.
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However, there has been increasing pushback from lawmakers and the country's crypto industry calling on the country to hold off on the crypto tax because they say the country isn't ready to implement it.
A major concern is that the government doesn't have the ability to effectively monitor cryptocurrency transactions done on foreign exchanges.
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The concern is that if the country goes ahead and imposes the tax without having an effective international reporting system in place, it will put South Korean crypto exchanges and their users at a disadvantage.
Another delay to 2029?
The crypto tax was first approved in South Korea in 2020 with plans to bring the tax into force in January 2022.
But the implementation of the tax has been delayed three times since then. First from 2022 to 2023, then to 2025, and then it was finally set to take effect in 2027.
Now it seems it could be delayed again until 2029.
Earlier this month, Democratic Party lawmaker Park Min-kyu proposed a bill that ties the implementation of the crypto tax to international information-sharing agreements.
The bill would see crypto taxation delayed until two years after the first exchange of cryptocurrency transaction information under the Organization for Economic Cooperation and Development's Crypto-Asset Reporting Framework (CARF).
CARF aims to allow tax authorities to track cross-border crypto transactions.
The U.S. is set to join the system in 2029. And there's concern that South Korean authorities might find it difficult to access data on transactions involving U.S. trading platforms prior to that.