Virtual Asset Tax Deferral Takes Shape? ... Democratic Party Finance Committee: "Recommend Deferral to Party Leadership"

Oh Gihyeong: "Additional preparations are unavoidable given the external environment and other factors"
A two-year tax deferral is likely

Democratic Party members of the National Assembly's Finance and Economy Planning Committee have settled on recommending a delay in taxation on virtual assets, members said on November 3. While they agree that taxation is necessary, they decided to recommend a postponement in light of preparations for implementation and other factors.

Rep. Oh Gihyeong, the Democratic Party's secretary on the National Assembly's Finance and Economy Planning Committee, told reporters after a policy coordination meeting of the standing committee that day, "We gathered the views of committee members on virtual assets. Many people stressed the basic principle of taxation that income should be taxed, but the majority view was that, given the external environment and policy conditions, it is unavoidable to allow additional time for preparation before implementation. We decided to make this recommendation to the party leadership."

Rep. Oh Kihyung, the Democratic Party of Korea's ranking member on the National Assembly's Finance and Economy Planning Committee, Yonhap News Agency

Reasons cited for the delay included the fact that the Crypto-Asset Reporting Framework (CARF), a system for the automatic exchange of information on virtual assets, will take full effect starting in 2029; the need to review changes to the tax system when the Digital Asset Basic Act is enacted; and the need to assess tax-related simulations.

Rep. Oh said, "Rather than imposing taxes on virtual assets right away next year, it is unavoidable that we first consider changes in the policy environment and check what else needs to be prepared. The committee therefore decided to recommend this view to the party leadership."

On the length of the proposed tax deferral, he said, "It seems that most people are talking about around two years. The committee's majority view has been consolidated into this recommendation. The party leadership will review it, and after discussions by the Policy Committee, we exchanged views on reflecting it directly in discussions next week or the week after."

The party leadership appears to favor a tax deferral. At a Supreme Council meeting on October 28, Democratic Party leader Kim Minseok said, "We agree that virtual assets should be taxed, but there are views that the tax system needs to be reviewed in light of tax fairness at home and abroad and changes in the market." He added, "I think we should first organize comprehensive policies to support and promote virtual assets."

Democratic Party members of the Finance and Economy Planning Committee are also reported to have discussed issues surrounding the Future Response Fund with government officials, including Minister of Planning and Budget Park Honggeun.

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