On Tuesday, Yoon Suk-yeol, South Korea’s newly-elected president, announced that he would try to delay taxation concerning crypto investment gains until the Digital Asset Basic Act (DABA) comes into force. DABA is an upcoming new set of regulations aimed at consumer welfare in the crypto space.
Last December, South Korea’s crypto tax enactment was pushed to 2023; initially, it was supposed to come into effect by the 2022 fiscal year. As per E-daily, the president-elect will make sure that the crypto tax law does not come into effect unless rational legislation is in place to protect consumers, which is expected by 2024.
Since March, Yoon’s presidential transition team has explored many options for delaying taxes. Part credit goes to Yoons’ stance on South Korea’s incompetence for not having the appropriate legislation before imposing taxes. The plan was to impose a 20% tax on crypto investment gains above about $2,100 per year.
The Financial Services Commission (FSC) conceived DABA in 2022. It lists a series of laws concerning consumer protection and welfare for those engaging in digital asset transactions. The act applies to nonfungible tokens (NFT), centralized exchange (CEX) listings, coin offerings, and international finance. The FSC plans to establish a crypto-insurance system as a wall against unauthorized transactions, system errors, and hacks.
Taxation of investment income from virtual assets should be done after investor protections are in place.
The newly elected president also plans to establish the Digital Industry Promotion Agency. It will serve as a reference point in the crypto industry for regulatory issues.