Taxes set to begin next year, but detailed rules are still missing... What now for crypto taxation? [Crypto Briefing]

[Financial News] Taxes are scheduled to be imposed on virtual asset transactions starting next year, but major South Korean exchanges have yet to put tax systems in place because the institutional framework is incomplete. As a result, calls are growing in the industry to defer taxation, if only to protect consumers.
 According to the crypto industry on the 25th, none of South Korea’s five major virtual asset exchanges has completed a tax system. Upbit, operated by Dunamu Inc., is preparing to begin development once details such as the items to be included in transaction statements and summary reports are finalized. Bithumb has not yet been able to start developing its virtual asset tax system. Coinone has held internal discussions about building a system, but work remains on hold. Digital X (formerly Korbit) plans to conduct performance tests and interface verification by March 31 next year. GOPAX, operated by Streami Inc., is still at the early stage of reviewing the system’s design. Although the companies’ responses differ somewhat, none has even begun development.
Under the current Income Tax Act, starting next January, 22% tax will be imposed on income from the transfer or lending of virtual assets after an annual deduction of 2.5 million won. Someone who earns 10 million won in annual profits from virtual asset investments would owe 1.65 million won in taxes.
Although taxation is set to take effect next January, major exchanges have been unable to build their systems because detailed standards, including regulations and forms, have not been finalized. The National Tax Service plans to request a preliminary review of its proposed notice on virtual asset taxation on the 6th of next month and issue an administrative pre-announcement on November 30. The notice is scheduled to take effect on January 1, 2027. The draft notice will be finalized on the 30th. The subsequent steps are collecting opinions, drafting the proposal and requesting a preliminary review, identifying those subject to regulation, approving the drafting plan, issuing the administrative pre-announcement, collecting opinions, and implementing the notice.
According to the office of Park Su-young, a People Power Party lawmaker on the National Assembly of the Republic of Korea’s Finance, Economy and Planning Committee, building tax systems for virtual asset exchanges is expected to take at least around six months; allowing for verification and stabilization as well, they will likely need roughly nine months or more to prepare. The virtual asset industry estimates that, from the point when the final tax standards and electronic submission specifications are finalized and a testing environment is available to the tax authorities, the process will require: two months to review and finalize detailed requirements; four months for system design and development; two months to verify data consistency and migrate historical data; two months for connection testing with the tax authorities and integrated testing; and one month for user verification, incident-response drills and stabilization. If the administrative pre-announcement is issued at the end of next month, the system will be completed in May next year at the earliest, or not until August next year if delayed.
An exchange official said, “Once the draft notice is finalized, we’ll do our utmost to comply, even if we have to handle everything manually, one by one,” while adding, “Some time after the National Tax Service issues its notice will be necessary to ensure user safety.” Another blockchain industry official complained, “If they push ahead with taxation like this and an incident occurs, it’s obvious the exchanges alone will be blamed,” adding, “This is how the authorities always view the blockchain industry.”
Calls for a “tax deferral” are growing within the industry as well. The Korea Digital Asset Business Association (KDA) has urged the government to further postpone taxation of virtual assets, scheduled to take effect next January, for two years, until 2029. KDA Chairman Kang Seong-hu said, “We are not opposed to virtual asset taxation itself,” but argued, “Taxation should come only after a Digital Asset Act that can provide investor protections on par with those for stocks, and tax standards, are put in place.”


[email protected] Han Yeong-jun Reporter