Democratic Party leader says digital asset framework law must come first
Democratic Party of Korea leader Kim Min-seok said Wednesday that he is formally proposing to the government that it defer the taxation of virtual asset income, which is set to take effect next year.
Kim made the announcement at a supreme council meeting at the National Assembly, saying the party had deliberated carefully through party-government consultations centered on the National Assembly's Strategy and Finance Committee, as well as meetings with virtual asset businesses.
"After comprehensively weighing taxation principles, domestic industry conditions and fairness among users, we reached a consensus within the party that it would be advisable to first enact a basic digital assets law to establish an overall framework and allow companies and investors time to adapt," Kim said.
Kim added that the party also took into account the fact that virtual asset income taxation had been delayed in the past. "This time, we will clearly set the deferral period and thoroughly prepare the groundwork — including using overseas transaction data, conducting electronic verification and improving taxpayer guidance," Kim said.
Virtual asset taxation has been deferred three times since the regime was established in 2020. Under the current schedule, taxation is set to begin in January. The key provision calls for a 22 percent combined rate — covering other income tax and local income tax — to be applied to annual income from the transfer or lending of virtual assets after a basic deduction of 2.5 million won ($1,860).
Within the party, some members had argued that taxing virtual assets this time around was necessary to preserve policy credibility, while others pushed for another deferral citing inadequate infrastructure. The party ultimately settled on a deferral.
Democratic Party lawmakers on the National Assembly's Strategy and Finance Committee had agreed Tuesday to convey to party leadership their view that a deferral was needed. The committee had floated a two-year deferral period. The final decision is expected to come after high-level party-government consultations.
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