The South Korean government announced a big measure for the virtual asset industry. The authority declared that the taxation of cryptocurrency will be postponed for two years.
According to reports, this step was taken as a result of the current situation of the global crypto market. However, it will also buy some time for the government to prepare investor protection measures.
The announced “2022 tax reform bill” mentioned that the government has formed a conclusion to suspend the taxation of virtual digital assets. Meanwhile, this taxation policy was to be implemented from January 1, 2023, for the next two years.
According to the announcement, the new taxation policy will be implied from January 1, 2025. However, the plan is to generate income from the transferring and lending virtual assets platforms. It also mentioned that distinct taxation will be applied at a 20% rate on income. A basic deduction of around 2.5 million won (approx $1910) has been applied.
The report stated that the government is looking after an investor protection system. Investors have suffered a huge loss due to the Terra LUNA collapse in May 2022. Since then authority has pointed out that some domestic virtual asset exchanges didn’t take certain measures to minimize the investors’ losses.