Mixed information about crypto tax rules creates chaos in South Korea

South Korean government officials caused confusion this year due to conflicting statements about the possible abolition or modification of the upcoming crypto tax that will take effect in 2022.

Throughout 2021, the debate on whether or how to modify the encryption tax in the National Assembly, the South Korean legislature, has become increasingly fierce. If it stays the same, the tax will impose a 20% tax on income generated from crypto transactions in excess of 2.5 million won (approximately US$2,100).

NFT regulations are the latest example of the chaos of crypto assets in the country.

On November 5, FSC officials made it clear NFT will not be constrained To crypto tax based on FATF guidelines, classify NFT and cryptocurrency.

but The decision was effectively overturned Do Gyu-sang, FSC vice chairman yesterday Said:

“The Ministry of Planning and Finance is preparing tax provisions for the NFT in accordance with the Special Reporting Act.”

The “Special Reporting Act” stipulates regulations for cryptocurrencies, including taxes.

Some people doubt whether the government has considered the best interests of the crypto industry, because the official policy direction seems to change direction so frequently. Nam Doo-wan of Stablenode Tweet Today: “The South Korean government:’We may change our position, but you people in charge of cryptocurrency will be slapped in the face before this happens.'”

Since April 2021, multiple postponement proposals The Democratic Party had a majority in the legislature, and its tax revenue gained momentum in the National Assembly until the opposition People’s Forces Party Finance Minister Hong Nam Ki eliminated it.this Also happened in September, And it is likely to happen again before the end of the year.

Although the conflict between the opposition parties is true, there are also some misinformation because the news media has already Report Wrongly believed that the tax was delayed. This confuses stakeholders in the Korean encryption industry and is exacerbated by non-Korean-speaking reporters reporting on these issues.

Jun Hyuk Ahn, director of communications at Vegax Holdings, told Cointelegraph, “With the upcoming presidential elections in March next year, the Democratic Party is trying to curry favor with people in the 20s to 30s by delaying tax collection.”

related: South Korea’s leading blockchain faces greater competition in the NFT market

Although the FSC has indicated that there are internal conflicts on how to implement the written laws, Ahn pointed out that “the power to amend the law lies with the National Assembly.”

The ability to amend the law was ultimately hindered by the party politics of the National Assembly, and the Democratic Party had to confront Minister Hong in the National Assembly.