South Korea weighs crypto tax abolition amid new income tax regime

In a policy briefing earlier this week, Jeong Jung-hoon, deputy minister of the tax and customs office for South Korea’s Ministry of Economy and Finance, said that the National Assembly, the country’s legislative body, should discuss whether to include crypto asset gains as part of a planned abolition of income tax for financial investments.

Jeong’s comment came in response to a public query as to whether tax on crypto should be scrapped alongside that on financial investments, local media ZDNet reported Wednesday.

The administration under President Yoon Suk-yeol intends to rescind the taxation on financial investments, such as stocks and funds, in an aim to support wealth accumulation and financial planning of its citizens.

The country’s crypto tax regime is set to take effect on Jan. 1, 2025. Taxpayers with over 2.5 million Korean won ($1,865) in crypto asset gains will be subject to a 22% levy. The tax regime on financial investment income is scheduled to commence on the same day.

Jeong said that the South Korean government plans to submit an amendment to its income tax law regarding financial investment taxation in late January or early February, according to the local media report.

The national election for the National Assembly is scheduled for April 10, potentially giving the current legislative body a limited timeframe to process proposed amendments.