Korean blockchain lobby calls for crypto tax plan to be put on ice

The Korea Blockchain Association has called for the government's new 20% crypto trading tax plan to be delayed for another two years.

According to an Oct. 14 report from News1 Korea, the Korea Blockchain Association, or KBA, is requesting regulators postpone the South Korean government's implementation of its long awaited new tax strategy until Jan. 1, 2023.

The KBA doesn't explicitly state it is against the 20% tax rate but said that crypto exchanges and companies in the industry need a "Reasonable period" to prepare for the Income Tax Act.

One of KBA's reasons for the delay is due to a short window between regulations applying to the old tax scheme and the start of the new one.

Crypto exchanges would be allowed to report on trades falling under the previous tax code until the end of September 2021.

Korea Blockchain Association chairman Oh Gap-soo implied that as this was the first time the government had gotten involved in taxing digital assets, a temporary suspension of the tax code might be necessary.

"The industry is having a great deal of difficulty in preparing for taxation because it is not equipped with a tax infrastructure in a situation where it is uncertain whether or not the business will continue ahead of the enforcement of the Special Payment Law.".

Under the new tax plan, gains made from virtual currencies and intangible assets will be classified as taxable income, calculated annually.

Any income generated from cryptocurrency trading above this threshold will be taxed at a set rate of 20%. Modifications to existing tax law are likely to impact many businesses across the country.

"The industry is in line with the principle to tax income from virtual assets and will actively cooperate," a representative for the KBA stated.