South Korea ponders scrapping crypto tax while considering the repeal of financial investment tax
South Korea is currently considering whether to include gains from cryptocurrency assets in the upcoming elimination of income tax on financial investments. In a recent policy briefing, Jeong Jung-hoon, the deputy minister of South Korea’s Ministry of Economy and Finance’s tax and customs office, suggested that the National Assembly should take into account gains from crypto assets when removing income tax on financial investments. This proposal comes in response to public inquiries about whether cryptocurrency taxation should be abolished alongside taxes on financial investments. The current government, led by President Yoon Suk-yeol, aims to eliminate taxes on financial investments to encourage wealth accumulation and sound financial planning among its citizens. South Korea’s current crypto tax regime imposes a 22% tax on crypto asset gains exceeding 2.5 million Korean won ($1,865) and is set to begin taxing financial investment income on January 1, 2025. Jeong revealed that the South Korean government plans to propose a revision to its income tax law in late January or early February, with a focus on financial investment taxation. However, the National Assembly faces a tight deadline to deliberate and process these proposed amendments due to the national election scheduled for April 10. Meanwhile, South Korea’s stance on cryptocurrency ETFs remains unchanged, despite the recent approval of a Bitcoin spot ETF by the U.S. Securities and Exchange Commission. The South Korean government continues to prohibit the launch of cryptocurrency ETFs and does not recognize digital currencies as financial assets, a policy that has been in place since 2017. Additionally, as of January 1, 2024, approximately 5,800 public officials in South Korea are required to disclose their financial holdings, including virtual assets, through the Public Ethics Transparency System. This move aims to enhance transparency in public service and strengthen the public’s right to information.
