TechFlow News, May 8: According to a ZDNet report, the South Korean government plans to impose taxes on virtual assets starting in January next year; however, opposition from opposition parties has heightened policy uncertainty. Moon Kyung-ho, Director of the Income Tax Division at the Ministry of Economy and Finance, formally confirmed for the first time during a National Assembly discussion that the government will proceed with taxing virtual assets as originally scheduled—effective January 1, next year—and emphasized that “income must be taxed.” Under the current amendment to the Income Tax Act, gains exceeding 2.5 million KRW from the transfer or lending of virtual assets are subject to a 22% tax rate.
However, the main opposition party, the People Power Party, argues that taxing only virtual assets while abolishing financial investment income tax is unfair, and is actively advancing a bill to abolish the virtual asset income tax. This bill has already been submitted to the National Assembly’s Committee on Strategy and Finance and will be reviewed by its Tax Subcommittee. Analysts suggest that, ahead of next year’s local elections, the ruling party may join discussions on postponing or abolishing the tax in order to secure support from younger voters.
