South Korea's ruling People Power Party is advancing a major policy shift: abolishing the planned virtual asset income tax initially scheduled for January 2027. The party will hold a closed-door meeting on March 25 at the Coinone headquarters, bringing together key industry stakeholders.
Meeting Participants and Agenda
The meeting is led by the People Power Party and includes representatives from South Korea's five major cryptocurrency exchanges——Upbit, Bithumb, Coinone, Korbit, and Gopax——as well as the Digital Asset Exchange Association (DAXA). The agenda covers three main topics: discussion of proposals to abolish the virtual asset tax system; regulatory measures for stablecoin issuance; and the timeline for subsequent legislative phases.
Amendment Background and Rationale
The initiative stems from a proposed amendment to the Income Tax Act submitted on March 19 by party whip Song Yeon-seok. The amendment argues against continuing virtual asset income tax, citing fairness concerns——taxing virtual assets alone after the removal of financial investment income tax would create inequity——and risks of double taxation, as virtual asset transactions could face both capital gains and value-added taxes. The amendment emphasizes the need for tax system consistency.
Industry and Policy Implications
Analysts say the proposal, if passed, would mark a significant shift in South Korea's virtual asset regulatory environment. The government had originally planned to impose a 20% capital gains tax on virtual asset trading profits from 2027, but implementation has been repeatedly delayed. The ruling party now directly proposing to scrap the tax signals support for the digital asset industry. Meanwhile, the focus on stablecoin regulation indicates South Korea is seeking a balance between encouraging innovation and managing risks.
The amendment is still under internal party discussion and must undergo parliamentary review. Market participants are closely watching whether the closed-door meeting can reach consensus to advance the legislative process. As one of the world's largest cryptocurrency trading markets, South Korea's policy moves carry significant weight for the global digital asset industry.