Rep. Song of the ruling party sponsors bill to grant three-year moratorium on virtual asset tax

It was revealed on the 14th that Son Eon-seok, a member of the People's Power Assembly (Chairman of the National Assembly's Planning and Finance Committee), was the lead sponsor of a bill to amend the Income Tax Act to postpone the implementation of taxation on virtual asset income for three years until 2028.
According to the current income tax law, income generated by transferring or lending cryptocurrencies (virtual assets) such as Bitcoin is classified as miscellaneous income and will be taxed from 2025.
As a result, starting next year, income from transfers and loans that exceed the virtual asset income deduction amount of 2.5 million won will be taxed at 20% (22% including local taxes).
However, some experts say that due to the low tax deduction amount (2.5 million won), virtually all virtual asset investors are subject to taxation.
In addition, there is still no system in place for investors to self-report and pay taxes on virtual assets, which could lead to major confusion in the market.
The government also shares these concerns, and the tax on virtual assets, which was originally scheduled to come into force in 2022, has been postponed twice due to system construction issues and other reasons, and has now been postponed until 2025.
The tax was scheduled to be imposed on January 1, 2021. In the 22nd general election, both the ruling and opposition parties pledged to adjust the tax on virtual assets. The ruling party announced that it would consider postponing the implementation of the tax on virtual asset investment income, while the opposition Democratic Party
The party also pledged to increase the tax deduction limit to 50 million won and to introduce a five-year system for carrying over losses and carrying them forward.
"In the current situation, suddenly imposing taxation without thorough and detailed preparations will cause chaos in the virtual asset market," he said. "If the amendment passes, a period of time will be secured for the system to be established for virtual asset income taxation.
"The government will be able to establish a more sophisticated system for reasonable taxation," he said. According to the Financial Intelligence Service under the Financial Services Commission, the number of virtual asset investors as of the second half of 2023 will be about 6
The number is estimated at 450,000.