A senior policymaker from South Korea’s ruling Democratic Party has argued that the country should delay taxing virtual asset gains until the proposed Digital Asset Basic Act is passed, saying taxation should not begin before the legal framework is in place. Speaking at a virtual asset conference in Seoul, Min Byung-deok said the issue is not opposition to taxation itself, but that enforcement conditions remain incomplete. He pointed to difficulties in tracking income earned through overseas exchanges and the fact that investment losses cannot be carried forward to future years under the current rules.
The government, however, is maintaining its existing timetable. Finance Minister Lee Hyoung-il told the National Assembly the same day that current tax law already provides for taxation of virtual asset income starting next year. He said about 85% of investors hold less than 5 million won in crypto and that, after the 2.5 million won basic deduction, most would either pay no tax or face only a small burden. Under the current framework, gains from transferring or lending virtual assets are taxed as miscellaneous income at 20% based on annual net gains, with no loss carryforward. The actual filing and payment window is expected in May 2028. DAXA and the opposition have also called for a delay, and a survey by Tiger Research and Chainalysis found that 73.7% of 2,423 investors opposed the plan.
South Korea’s ruling Democratic Party is pushing to delay crypto taxation until the Digital Asset Basic Act is passed, while the finance ministry says the tax should still take effect on schedule.
According to The Korea Times, Min Byung-deok, a senior figure in the party’s policy committee, said at a virtual asset conference in Seoul on Sept. 29 that crypto taxes should not begin before the underlying legal framework is in place. He said the problem is not taxation itself, but that the conditions needed to administer the tax are still not mature.
The virtual asset income tax had been set to start on Jan. 1, 2027, but has already been postponed three times because of shortcomings in tax administration infrastructure, market volatility and incomplete investor protection arrangements. Min said income earned through overseas trading platforms is difficult to track, and investment losses cannot be carried forward to future tax years under the current setup.
The South Korean government is still holding to the current timetable. Finance Minister Lee Hyoung-il told the National Assembly the same day that existing tax law already states that virtual asset income will be taxed starting next year. He added that about 85% of investors hold less than 5 million won in virtual assets, and that after applying the basic exemption of 2.5 million won, most would either owe no tax or face only a small tax burden.
Under the current rules, income from transferring or lending virtual assets is taxed as miscellaneous income at a 20% rate, based on annual net gains. Losses cannot be carried forward. The actual filing and payment window is expected in May 2028.
The Digital Asset eXchange Alliance, or DAXA, as well as the opposition party, has also called for a delay. A survey by Tiger Research and Chainalysis covering 2,423 investors found that 73.7% opposed the tax plan.
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