South Korean incumbent president Yoon Suk-yeol has decided to defer crypto taxes by reportedly wanting to use a different regulatory framework.
President -elect Yoon is adamant enough to remain crypto -friendly as he is able to lift the Initial Coin Offering (ICO) ban imposed in 2017.
This switch is one of the other important actions that President Yoon’s Transition Committee will take to remain friendly to digital assets.
Their motives include providing a suitable environment for investors to be able to trade digital assets with ease.
The delay in the planned taxation can be considered the absence of a proper taxation system along with appropriate measures to protect the interests of investors.
South Korea is now the latest country to have made digital asset regulatory reforms a leisurely pace.
The lifting of the ICO Prohibition is Part of a broader Crypto Pledge
The ICO approval is just one of 110 other tasks decided by the Presidential Transition Committee.
The size and regulatory plan has been divided into two parts, which separate securities from non-securities.
The candidate for deputy prime minister and finance minister to be confirmed, Choo Kyung-ho should have said that taxes starting in 2025 can be expected to be more crypto-friendly.
It may be because a clear and concrete definition of legally accepted cryptocurrency assets will be rolled out.
The proposed bill now requires caution and access to the digital asset listing and insurance process.
Reports from local stores say that the Digital Asset Framework Act only wants to ensure a safe and certain environment for investors to gain trust.
The report also noted that, in terms of maintaining a regulatory stance, the committee should follow the point of view of international financial institutions such as the Bank of International Settlements (BIS) and U.S. executive agencies.
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Crypto Is Seeing The Benefits Of Just Using It
Yoon Suk-yeol is rumored to be of the opinion that deferring taxes on crypto-gain is the right way to go until the Digital Asset Basic Act (DABA) is passed.
The 2017 ban on the ICO was imposed because of the nature of the asset as a volatile asset along with many illegal and criminal activities facilitated by the same.
The cryptocurrency regulatory framework in South Korea has relaxed, by 2020, cryptocurrency in the country will be regulated and legalized.
Since President-elect Yoon Suk-yeol remains steadfast in introducing crypto taxes only when a proper protection framework is introduced, crypto tax laws will not take effect until 2024.
No specific taxation scheme and standards have been decided upon, but the state’s finance ministry may classify the return of such digital assets as “other income”. Profits from digital assets will be considered in the same category and mean they are below the 20%bracket.
The tax imposed on “other income” is relatively high, but still lower than the tax imposed on current cryptocurrency, which can be up to 42%.
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Featured image from UnSplash, chart from TradingView.com
