National Tax Service Commissioner Lim Gwang-hyeon said Tuesday that the agency is preparing to issue a notice setting out taxation standards for virtual assets next month.
Speaking at a national audit conducted by the National Assembly's Finance and Economy Planning Committee at Government Complex Sejong, Lim responded to a question from People Power Party lawmaker Lim I-ja about the timing of the notice: "We are preparing to be ready around November."
Lawmaker Lim said the government's preparations were insufficient, noting that clear taxation standards had not been established for various types of virtual asset transactions, including staking, airdrops, hard forks and decentralized finance, or DeFi.
Commissioner Lim said in response that "the economic substance of a transaction matters more than its type or name," describing the key question as "whether it constitutes a transfer or a loan."
He said airdrops and hard forks should be treated as taxable if they carry the character of a transfer or loan. However, he added that some cases — including staking — would require consultation with the Ministry of Economy and Finance.
Finance and Economy Planning Committee Chairman Cho Seung-rae asked the government to proceed with preparations on the assumption that the regime would take effect unless the National Assembly decided to delay it. He also requested that the NTS report its notice plan at the committee's comprehensive audit session after coordinating with the Ministry of Economy and Finance.
Earlier that morning, Lim told People Power Party lawmaker Park Soo-young, who asked about the state of preparations for virtual asset taxation, that the agency was "preparing to execute it without any hitches."
When Park asked whether the Ministry of Economy and Finance or the NTS was the primary body responsible for preparing for the tax, Lim said: "Both sides need to do their part — we are handling the systems side and the practical work."
On the number of taxpayers subject to the levy and the expected tax revenue, Lim declined to provide specific figures, saying: "Once the law takes effect, we will receive the data and need to begin verification starting with the May 2028 filings."
Asked about reports that the five domestic virtual asset exchanges — Upbit, Bithumb, Coinone, Digital Exchange and Gopax — were insufficiently prepared to build their virtual asset taxation systems, Lim said the NTS was "continuously consulting with the exchanges at the working level."
He also said that even after the Crypto-Asset Reporting Framework, or CARF, takes effect, there would be limits to the government's ability to capture taxable income.
"Virtual assets are such a new area that they are a challenge not just for Korea but for tax authorities around the world," Lim said. "When CARF is implemented, it will enable a more advanced exchange of information."
He added that "even countries that do tax virtual assets face difficulties with hard-to-track transactions such as peer-to-peer wallet transfers," and that the issue was a standing topic at meetings of tax authority heads. "We keep discussing how to cooperate and how to work toward capturing taxable income — it seems like something that time will have to resolve," he said.
oskymoon@heraldcorp.com
