Ruling Party Finance Committee Members Favor Two-Year Delay in Virtual Asset Taxation, Plan to Recommend It to Party Leadership

[Financial News] Democratic Party of Korea lawmakers on the National Assembly’s Strategy and Finance Committee have agreed to recommend to party leadership that taxation of virtual assets be deferred for an additional two years. They believe related systems, including the international exchange of tax information and the General Act on Digital Assets, should be put in order first ahead of taxation taking effect next year.
On the 3rd, Democratic Party finance committee members held a closed-door meeting at the National Assembly, attended by an official from the Ministry of Planning and Budget, to discuss deferring virtual asset taxation. Oh Gi-hyoung, a Democratic Party lawmaker and the ruling party’s secretary on the National Assembly’s Strategy and Finance Committee, later told reporters, "While we agree with the basic tax principle that income should be taxed where it arises, the majority view was that, given various policy circumstances, it would be unavoidable to allow a period of preparation before implementation." On the length of the deferral, he added, "Most people seem to be talking about around two years," suggesting that the duration was taking shape.
The reasons cited for a deferral included the introduction in 2029 of an international system for exchanging tax information on virtual assets and changes in market conditions following enactment of the General Act on Digital Assets. Oh said, "The General Act on Digital Assets could be put in place as early as the first half of next year," adding, "There was a view that the tax system should be updated to align with new classifications of business operators and transaction structures." The plan also includes reviewing how tax data can be used between the National Tax Service (NTS) and exchanges, running tax simulations using actual transaction data, and checking system stability.
The Democratic Party plans to incorporate the deferral proposal when it discusses amendments to the Income Tax Act at a future meeting of the Tax Subcommittee of the Strategy and Finance Committee.

[email protected] Jiwon Song Reporter