Ministry of Finance and Economy: "Carefully Considering a Reasonable Approach to Virtual Asset Taxation... Will Consult Closely with the National Assembly and Reach a Conclusion"

Institutional reform forum hosted by ruling party held at National Assembly on the 2nd
Moon Kyungho, director of the Income Tax Division: "Considering fairness for users of overseas exchanges, among other factors"

With the taxation of virtual assets, which was scheduled to take effect in January next year, increasingly likely to be postponed for another two years, the Ministry of Finance and Economy, the ministry in charge, said it would reach a final decision after consulting with the National Assembly, taking into account changes in market conditions and tax fairness with overseas exchanges. The government, which had said it would proceed with taxation as scheduled, has left open the possibility of consulting with the National Assembly at a working-level forum following the parliamentary audit. This appears to put a fourth deferral of taxation in motion.

A policy forum titled "Coin Exodus: We Can No Longer Stand By—Urgent Review of the Competitiveness of Korea's Digital Asset Market in the AI Era and Measures to Improve the Regulatory Framework" was held at the National Assembly Library on the afternoon of the 2nd. It was jointly hosted by the offices of Democratic Party of Korea lawmakers Lee Gwangjae, Min Byeongdeok, Park Mingyu and Lee Gangil, and the Digital Asset Policy Forum. Photo by Park Seunguk

Ministry of Finance and Economy: "Considering market conditions and fairness with overseas exchanges... We will reach a conclusion after consulting with the National Assembly"

A policy forum titled "Coin Exodus: This Can No Longer Be Left Unaddressed - An Urgent Review of the Competitiveness of Korea's Digital Asset Market in the AI Era and Measures to Improve the Institutional Framework" was held at the National Assembly Library on the afternoon of the 2nd. With opinions divided over whether to defer taxation ahead of its scheduled start on January 1 next year, the forum was organized to hear a range of views from the government, experts and industry representatives.

Moon Kyungho, director of the Income Tax Division at the Ministry of Finance and Economy, who participated as a panelist in the session "Key Issues and Policy Challenges in the Digital Asset Tax System," suggested that the tax system could be revised and that consultations with the National Assembly were possible. "Experts and industry representatives alike agreed with the principle that taxation is inevitable as virtual assets are brought into the institutional framework," Moon said. "However, opinions were raised that we need to reflect the changes in market conditions since the legislation was passed in late 2020 and consider the global policy environment, including fairness for users of overseas exchanges." He added, "We are carefully considering a reasonable approach that the public can accept and that can be implemented reliably in practice," and said, "We will closely consult with relevant ministries and the National Assembly to reach a final conclusion."

Deputy Prime Minister and Minister of Finance and Economy Lee Hyeongil delivers opening remarks at a government-party consultation on virtual asset taxation held at the National Assembly Members' Office Building on Oct. 28, 2026. Photo by Yoon Dongju

The government had maintained that it would not include a tax deferral in this year's tax reform proposal and would proceed next year under current law. It cited the risk that postponing taxation again, after three previous delays, could undermine the consistency and credibility of tax policy. However, the mood shifted during the parliamentary audit last month. After lawmakers focused on shortcomings in the system, including the lack of measures to address offshore tax evasion and the exclusion of loss carryforwards, Vice Prime Minister and Minister of Finance and Economy Lee Hyungil softened his position, saying, "We will gather the National Assembly's views and give the matter the fullest consideration." The ruling party and the government are currently coordinating a plan to defer taxation for another two years, until January 2029, while also pursuing legislation to improve the system in line with market conditions.

"With the financial investment income tax abolished, fairness is lacking... A 'conditional deferral,' not just a delay, should be pursued

At the forum, participants urged that a deferral of virtual asset taxation be linked to the broader capital gains tax system, rather than treated as a simple delay. Kim Woochul, a professor in the Department of Taxation at the University of Seoul, argued for a "conditional, temporary deferral" rather than a simple postponement. "The current classification as other income is a framework devised as a stopgap six years ago, and it is inadequate even because it does not allow loss carryforwards," Kim said. He noted that "addressing shortcomings, such as allowing loss carryforwards and raising the deduction for necessary expenses, is a technical matter that can be resolved quickly if the National Assembly reaches an agreement."

"With the financial investment income tax abolished, investors who earn substantial sums from stock capital gains are not taxed, while applying capital gains tax only to virtual assets is inconsistent with horizontal equity," he said. "If the government unilaterally grants a deferral simply in response to public opinion, it will only undermine confidence in the tax system." He added, "The government should clearly present a timeline for introducing an alternative tax framework covering financial investment income as a whole within one or two years, and pursue a 'conditional deferral' that integrates virtual asset taxation into that framework."

Earlier, Ahn Sunghee, a professor at the Catholic University of Korea who delivered the opening presentation, said, "Since the law was revised in 2020, transactions such as airdrops and staking have diversified, but the current tax law does not cover them." She added, "To prevent domestic investors from being treated unfairly due to the delay in introducing the OECD Crypto-Asset Reporting Framework (CARF), measures such as raising the basic deduction must be taken first."

Concerns were also raised about the pace of taxation and the risk of domestic exchanges being treated unfairly. Yoon Sunghoon, a professor at Hallym University, proposed that "in light of the abolition of the financial investment income tax, taxation should begin at a low rate of around 5% and increase gradually." Kim Jaejin, standing vice chairman of the Digital Asset Exchange Alliance (DAXA), warned, "If the government tightens restrictions on domestic exchanges while leaving loopholes in overseas derivatives and stablecoins unaddressed, it will drive capital and users overseas."

This content was produced with the assistance of AI translation services.