South Korea to Tax Cryptocurrency Income from 2025

South Korea’s Democratic Party has confirmed its plans to introduce a tax on cryptocurrency income beginning in early 2025. The primary tax rate will be set at 20%, and it will apply to users whose annual income from digital assets exceeds 50 million won (approximately $36,000). The decision to implement the tax comes despite multiple delays and criticism from investors.

Initially scheduled for implementation in 2022, the bill has been postponed several times due to concerns about its potential impact on the market. However, according to Seoul Shinmun, the ruling party is determined to move forward with the tax plan without further delays.

Income Limits and Tax Exemptions

One of the key amendments to the bill is the establishment of a minimum income threshold of 50 million won for taxation. This measure aims to alleviate the burden on small-scale investors, focusing instead on major players in the cryptocurrency market. However, representatives of the Democratic Party clarified that excessively raising the threshold would effectively undermine the purpose of the tax plan.

The decision has sparked mixed reactions: while some experts see it as a necessary step towards market regulation, others warn of potential negative consequences for South Korea’s cryptocurrency industry.

Preparing for a Vote

The bill on cryptocurrency taxation is set to be voted on in South Korea’s National Assembly on November 25–26. Its approval is expected to be a significant step in strengthening the country’s legal framework for digital assets.

In addition, in July 2024, South Korea introduced amendments to the law on virtual asset user protection, requiring cryptocurrency exchanges to suspend suspicious client transactions. This highlights the authorities’ commitment to creating a more transparent and secure market for all participants.