The People Power Party in South Korea is pushing for a delay of two years in implementing taxes on profits made from investing in cryptocurrencies.
The decision is viewed as a possible pledge for the forthcoming national election set to take place in April.
The main focus of the party is to first set up a thorough regulatory system for cryptocurrencies, rather than rushing into implementing tax policies.
South Korea’s Ruling Party to Propose New Regulations
Herald Business Daily reported that the conservative party plans to introduce a fresh set of rules specifically targeting the cryptocurrency sector in the next term.
The party’s main priority is to postpone the start of the crypto gains tax set to begin in January 2025 by addressing regulatory actions initially.
The tax plan’s implementation would be postponed, with the new start date set for 2027.
To prepare for the upcoming election, the ruling party is exploring the possibility of unveiling a bill that addresses key components of future cryptocurrency regulations.
Rules may cover specifications for cryptocurrency custodians and criteria for adding tokens to exchanges.
In addition to South Korea’s upcoming crypto regulations scheduled for implementation in July, these new regulations would further enhance the existing framework.
The People Power Party expects to put down the final touches on all important political promises so that they are set in place at the end of the current month.
A proponent of South Korea’s Ministry of Economy and Finance has previously argued in the National Assembly that income tax on cryptocurrency assets should be discontinued.
The proposal is in line with the current government’s effort to eliminate the proposed tax on financial investments, such as stocks and funds.
The People Power Party, as reported by the Herald, does not appear to be advocating for a total elimination of the proposed cryptocurrency tax.
The party not only seeks a tax delay but also strives to align the cryptocurrency tax threshold with that of stocks.
The tax plan now applies a 22% tax rate on profits from cryptocurrency that are more than 2.5 million Korean won, equivalent to around $1,875.
On the other hand, only profits from stocks exceeding 50 million won are subject to taxation.
South Korea to Mande Officials Disclose Crypto Holdings
From January 2019, Japan will oblige top government officials to disclose their cryptocurrency holdings, just like they did in December of the previous year.
It was an active personnel ministry that took the lead by addressing the potential conflicts of interest and corruption at the public offices.
The administration is hoping that public servants agree to the disclosure of their cryptocurrency portfolios to maintain ethical standards and avoid any issues of conflict of interest as it relates to their investments in cryptocurrency markets.
The mandate will be enforced on senior personnel in numerous government offices and bureaus.
Such officials need to do a public disclosure of all the information about their cryptocurrency assets with the details on which and how many assets are owned in decimal.
Lee Bok-hyun, chairman of the Financial Supervisory Service in South Korea, is going to travel to the U.S and meet Gary Gensler, the Chairman of the Securities and Exchange Commission of America to discuss on cryptocurrency sector.
Officially, the official with Gensler will chat about ETFs that trace with the current market value.
Frequently Asked Questions:
What is the reason for the south Korean People Power Party’s urging for delay of cryptocurrency tax collection?
The party has set as its election pledge a deferral of cryptocurrency taxation for two years, to be effected from the next election. With this in mind, their primary aim is to facilitate the establishment of a comprehensive regulatory framework for cryptocurrencies before moving on with the policy on taxes.
How does the ruling party intend to regulate the cryptocurrency sector with their proposed measures?
The People Party Power is now finalising a modified set of standards that would cover several areas of the cryptocurrency industry, including crypto custodians’ regulations and the token listing process.
What is the expected timeline for implementing the new tax on cryptocurrency profits, and what are the goals behind postponing its implementation?
The tax on cryptocurrency profits that was supposed to start in January 2025 has been postponed for two years, now set to begin in 2027. This extension is meant to provide ample time for the establishment of thorough regulations for cryptocurrency.
Could the ruling party be contemplating the complete elimination of income tax on cryptocurrency assets?
Although the Ministry of Economy and Finance has proposed the idea of eliminating income tax on crypto assets, the People Power Party does not appear to be considering full abolition. Their attention is more on aligning the tax threshold for cryptocurrencies with stocks.
What strategies does the party have in place to align the tax threshold for cryptocurrencies with that of stocks, and what are the existing tax rates being considered?
The party is working to make the cryptocurrency tax threshold more in line with that of stocks. At present, crypto gains over 2.5 million Korean won are taxed at a rate of 22%, whereas stock gains are only taxed once they exceed 50 million won.
What so what has South Korea done as a country to solve the problem of cryptocurrency ownership by high-ranking officials?
Last quarter of 2017, South Korea announced a ground breaking decision saying that government officials including top-level officials in the government should report their cryptocurrency assets to promote transparency and prevent any conflicts of interest. The goal of this initiative is to be the guarantee of due diligence and ethics in public service.
What data on cryptocurrencies listed during the term of office must be released by top public officials and what is its purpose?
The government has committed to taking an active role in ensuring ethical best practices and complying with the rules of fair play within the cryptocurrency market in its relations with public officials. Top officers must report all the crypto details of information, which include the exact amounts and the kinds of assets they possess.
How is Korea actively involved in the world on a global level in the cryptocurrency area?
Lee Bok-hyun, the head of the Financial Supervisory Service in South Korea, has a trip to the United States for discourse on the cryptocurrency sector with SEC Boss Gary Gensler. ETFs will be the key topic during the meeting if funds are invested in Bitcoin.
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