Virtual Asset Taxation Starting Next Year: Growing Calls to "Align with Global Standards"
Starting January next year, taxes will be levied on virtual asset (cryptocurrency) income in South Korea. However, concerns have recently been raised among experts that the current taxation system does not align with global standards. Investors are paying close attention to how the new tax system will impact the market.
At the recently held founding forum of the Korea Digital Asset Society, Professor Jang Min of POSTECH cited examples from major countries such as the United States and the United Kingdom. According to Professor Jang, the U.S. and the U.K. allow indefinite "loss carryforwards," which carry over losses from virtual asset investments to subsequent years, and "netting of gains and losses," which calculates the combined profits and losses from multiple investments.
In contrast, South Korea's current plan classifies virtual asset income as "miscellaneous income," similar to lottery winnings. This approach poses a problem where investors may have to pay high taxes on immediate profits even if they have suffered significant losses in the past. Investors are worried about the situation, calling it a "tax bomb," as they may have to pay taxes before even recovering their losses.
Experts point out that these differences increase uncertainty in the virtual asset market. A tax system that is far removed from global standards could work against domestic investors and is highly likely to undermine the competitiveness of the Korean virtual asset market in the long run.
As the implementation of virtual asset taxation is just around the corner, there are many opinions that the government and the National Assembly should establish more reasonable standards. Many experts emphasize that improving the system to meet global standards is urgent for investor protection and the stable development of the market.