South Korea's National Assembly Finance and Economy Planning Committee stated on the 29th that abolishing digital asset taxation requires careful review. Senior Expert Choi Byung-kwon made the statement in a review report on an Income Tax Act amendment, citing concerns that reversing the already-decided taxation policy could undermine tax administration credibility and cause market instability. The statement addresses a legislative proposal submitted in March by Rep. Song Eon-seok of the People Power Party to abolish digital asset income taxation, which has already been postponed three times.
Committee Official Cites Tax Policy Credibility and Market Stability Concerns
Choi Byung-kwon stated in the review report that "considering the enhancement of tax administration credibility and market impact, careful review is necessary regarding the abolition of (digital asset) taxation." He explained that the amendment seeks to abolish taxation on digital asset income for which the implementation date has already been postponed three times, and noted that "reversing the already-decided taxation of digital asset income through tax subcommittee discussions could lower credibility in tax policy and potentially cause market instability."
Seven Countries Already Tax Digital Asset Income
The committee official referenced international practices, stating "it is necessary to note that other countries such as the United States and Japan are already taxing digital asset income." According to the review report, "the current status of digital asset income taxation in major overseas countries shows that the United States, Japan, the United Kingdom, France, Germany, Canada, and Australia are already imposing taxes on digital asset income."
Infrastructure Inadequacy and Equity Arguments Acknowledged
Choi Byung-kwon identified two main arguments supporting abolition: equity concerns related to financial investment income tax abolition and inadequate taxation infrastructure. On equity issues, he noted that "opposing opinions can be raised that digital assets do not fall under financial investment, making linkage with financial investment income tax inappropriate, and unlike the stock market, there is no policy necessity to support the digital asset market." Regarding infrastructure, he stated "there is a problem of inadequate government preparation for taxation, as no additional infrastructure related to digital asset taxation has been constructed and implemented, and infrastructure implementation for settlement has not yet been achieved." He added "it is necessary to consider that it is difficult to determine whether infrastructure for implementation without disruption in 2027 has been constructed and settled."
Government Plans January 1, 2027 Implementation Amid Party Divide
The government plans to implement digital asset income taxation from January 1, 2027. The ruling Democratic Party shows no clear opposition internally. The People Power Party advocates for abolition or postponement of the taxation.
FAQ
What did South Korea's Finance Committee say about digital asset tax abolition on the 29th?
Senior Expert Choi Byung-kwon stated in a review report that abolishing digital asset taxation requires careful review, citing concerns that reversing the already-decided policy could undermine tax administration credibility and cause market instability.
Which countries already tax digital asset income according to the committee report?
The review report identified seven countries already imposing taxes on digital asset income: the United States, Japan, the United Kingdom, France, Germany, Canada, and Australia.
When does the South Korean government plan to implement digital asset income taxation?
The government plans to implement digital asset income taxation from January 1, 2027, though the People Power Party advocates for abolition or postponement while the ruling Democratic Party shows no clear opposition.
