The People Power Party has called for abolishing the capital gains tax on virtual assets scheduled to take effect next year. The move is seen as aiming for the youth vote ahead of the June 3 local elections.
On the 25th, at Coinone's headquarters in Park One Tower in Yeouido, Seoul, the People Power Party held an on-site roundtable on improving the digital asset taxation system with the heads of the five major domestic virtual asset exchanges and discussed directions for related tax reform. Following the on-site roundtable, the People Power Party plans to formalize its stance on abolishing virtual asset taxation through public hearings with the industry and investors.
Attending the meeting were Floor Leader Song Eon-seog, Policy Committee Chair Jeong Jeom-sik, Rep. Park Su-young, Senior Policy Secretary to the Floor Leader Kim Eun-hye, Senior Operations Secretary to the Floor Leader Yu Seong-beom, Senior Spokesperson Choi Bo-yoon, and Senior Floor Spokesperson Park Chung-gwon. From the virtual asset industry, attendees included Dunamu CEO Oh Kyoung-suk, Bithumb CEO Lee Jae-won, Coinone CEO Cha Myung-hoon, Korbit CEO Oh Se-jin, Streami Vice President Choi Han-gyeol, and Digital Asset eXchange Alliance (DAXA) Executive Vice Chairman Kim Jae-jin.
Floor Leader Song said, "With the number of virtual asset investors exceeding 13 million, the financial investment income tax has been abolished, but taxing only virtual assets starting next year is not fair," adding, "In the United States, there was a decision to view virtual assets as commodities, and Korea already treats them as commodities and imposes value-added taxes. If income tax is added on top of that, it could lead to double taxation."
Under the current Income Tax Act, starting Jan. 1, 2027, income generated by transferring or lending virtual assets will be classified as "other income" and taxed. A 22% rate, combining other income tax (20%) and local income tax (2%), will apply to annual revenue exceeding 2.5 million won. Virtual asset taxation has previously been deferred three times due to opposition from domestic investors and a lack of taxation infrastructure.
Within the industry, questions have continued over tax equity between stocks and virtual assets following the abolition of the financial investment income tax. For stocks, capital gains on domestic listed shares are tax-exempt unless the holder is a major shareholder, and for foreign stocks, only net profits after offsetting annual gains and losses are taxed.
After the roundtable, Rep. Park Su-young told reporters, "From today's discussion, it appears the National Tax Service is still short of the preparation and capacity needed to impose income tax on virtual assets," adding, "There were also concerns that taxation could spur the outflow of (domestic funds) to overseas exchanges."
There is also a view that the People Power Party is seeking to seize the legislative initiative on virtual assets to target the youth vote in the June 3 local elections. In response to a related question, Rep. Park said, "With real estate prices soaring and young people unable to build assets, abolishing the tax on virtual assets would be a great help to the younger generation."
On the 19th, Floor Leader Song Eon-seog also introduced a partial amendment to the Income Tax Act to abolish income tax on virtual assets while maintaining the current value-added taxes structure. The crux is to abolish income tax on virtual assets while keeping the value-added taxes regime applied to exchange fees and the like, by adjusting the tax structure. The aim is to reorganize the tax system and resolve double taxation concerns in line with the recent move by the U.S. Securities and Exchange Commission (SEC) to classify virtual assets as commodities.