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If you earn 10 million won next year, stock tax is 0 won, virtual asset tax is 1.65 million won... Effectiveness also pointed out
An opinion was raised that virtual asset taxation, which will be introduced next year, does not align with tax equity and that its effectiveness will not be secured due to insufficient taxation infrastructure.
On the 7th, the Korea Tax Policy Association, co-hosted with People Power Party lawmaker Park Soo-young at the National Assembly Members' Office Building in Yeongdeungpo-gu, Seoul, held an 'Emergency Review Debate on Virtual Asset Taxation' sponsored by the Digital Asset Exchange Joint Council (DAXA).
Oh Moon-sung, president of the Korea Tax Policy Association, pointed out in his presentation that taxing only virtual assets while the Financial Investment Income Tax (Geumtuse) on stock investment income has been abolished violates the constitutional principle of tax equality.
He explained that if an investor earns 10 million won in profit next year, the tax on stocks will be 0 won, while virtual assets will incur a tax of 1.65 million won (22% tax rate applied to the portion exceeding the 2.5 million won deduction).
He said that virtual asset income should be classified as other income, not capital gains, and that the lack of loss deduction also needs to be supplemented.
He also pointed out that there are issues with effectiveness, as it is practically difficult to ascertain the income of users of overseas virtual asset exchanges, which could lead to tax gaps.
Professor Emeritus Hong Ki-yong of Incheon National University's Business Administration Department stated in the debate, "According to the principle that income should be taxed, virtual assets are also subject to taxation, but considering various circumstances such as market conditions and taxation infrastructure, the necessity seems to be less."
On the other hand, Moon Kyung-ho, head of the Income Tax System Division at the Ministry of Economy and Finance, stated, "Our position is that (virtual asset taxation) should proceed as planned," explaining, "While virtual assets are being incorporated into the institutional framework through the Virtual Asset User Protection Act, only the income tax has not seen improvement."
He added, "Information sharing between member countries will occur through CARF (Crypto-Asset Reporting Framework) for overseas exchanges, so I believe reporting and verification will be possible through this," and "We will enhance tax effectiveness by expanding the infrastructure."
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