Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, said, "We are pushing ahead to tax virtual assets (cryptocurrencies) starting next year as scheduled."
Koo, the deputy prime minister, answered this way to a question from People Power Party lawmaker Kim Sang-hoon about the government's stance on taxing virtual assets during a briefing to the National Assembly's Strategy and Finance Committee on the 29th.
Kim said, "Even when gains occur from virtual assets, they are classified as miscellaneous income, so loss carryforwards are not allowed," adding, "For example, if there is a loss of 10 million won this year and revenue of 5 million won next year, the net is a 5 million won loss, but the structure still taxes the 5 million won that occurs next year." He continued, "Major advanced countries such as the United States, the United Kingdom, and Australia treat virtual assets as capital gains and allow loss carryforwards," and said, "The government should review this as well."
In response, Koo said, "Countries like the United States, Japan, and the United Kingdom tax them as capital gains, but since we do not have a capital gains tax framework, we classify them as miscellaneous income and operate a system that gives benefits (deductions) while applying a separate 20% tax," adding, "To move to a capital gains tax framework, there is an aspect that we need to look comprehensively and systematically at how to handle not only virtual assets but the entire capital market."
Koo said, "As of now, taxation is only deferred until the end of this year, so we will first implement it next year and make supplements as needed."
The virtual asset tax is a system that applies a 22% tax rate (miscellaneous income tax + local income tax) to the portion of income from virtual asset transfers or lending that exceeds 2.5 million won per year. It was initially scheduled to be implemented in 2022, but implementation was postponed three times, and it is currently set to take effect from Jan. 2027.