On the 28th, Kim Gap-rae, senior research fellow at the Korea Capital Market Institute, argues for the need to defer virtual asset taxation through a discussion at the National Assembly seminar on the second legislative task for innovation in the virtual asset industry and blockchain. / Photo = Reporter Sonmin Blooming Beat While virtual asset taxation is scheduled to be implemented from January next year, the domestic virtual asset taxation law is benchmarked against Japan’s failed miscellaneous income taxation system, and it has been argued that tax deferral is the best alternative at present.
At the ‘2nd National Assembly Seminar on Legislative Tasks for Virtual Asset Industry and Blockchain Innovation’ held at the 3rd Seminar Room of the National Assembly Hall in Yeouido on the 28th, Kim Gap-rae, senior researcher at the Korea Capital Market Institute, said, “In the current situation where a practical taxation system has not been introduced, (virtual “The only alternative (asset taxation) is deferment,” he said. “At a time when the virtual asset market is recovering, the implementation of virtual asset taxation without loss carry-forward deduction will open the stomach of the goose (that lays golden eggs).” It is an act of dividing,” he said.
Senior Research Fellow Kim said, “The domestic virtual asset taxation law benchmarked Japan’s miscellaneous income (similar to domestic other income) taxation system,” and asked, “This is a bill that failed in Japan, so should we follow in its footsteps?” He then pointed out, “In the case of Japan (after the implementation of taxation), the virtual asset market that existed in the past has also shrunk, and the rate of use of the yen in virtual asset transactions has decreased to less than 1%.” Japan, which once accounted for 50% of global virtual asset transactions, has seen a slump in the virtual asset industry since the implementation of taxation, and is currently pursuing a plan to relax virtual asset tax regulations.
Furthermore, he criticized, “In the case of Japan, there are specific taxation guidelines for individual aspects such as landing and staking,” and “In Korea, where the relevant taxation system is not established, it is a half-taxation that only taxes capital gains from virtual asset exchanges.” He continued, “(If virtual asset taxation is implemented now), conscientious taxpayers will experience problems,” and added, “It could become an issue of tax fairness.” The explanation is that prior to implementing virtual asset taxation, active authoritative interpretation of the definition of virtual asset rental income and the scope of recognition of necessary expenses should be prioritized.
“Let’s postpone the tax period and improve the system.”
There are also concerns that health insurance premiums may increase if virtual asset taxation is implemented. Under the current income tax law, income from virtual assets is considered ‘other income subject to unconditional separate taxation,’ and there is no clear legal basis for excluding it from the imposition of health insurance premiums.
Researcher Kim pointed out, “In the process of deciding on virtual asset taxation, there was no discussion of health insurance premiums, which can be subject to quasi-taxation of up to 8%,” and “there is no legal basis for excluding other income subject to separate taxation from the imposition of health insurance premiums.”
However, he said, “The timing of implementation should not be delayed as in the past. If the postponement is implemented this time, we will request tax authorities to provide legislation on research services on airdrops, transfer acquisition values, etc. through a subsidiary opinion on the Income Tax Act amendment, and the National Assembly will also continue to support it.” “We will have to monitor it,” he said.
He added, “In the long term, various discussions will be needed, such as defining income from virtual assets as capital income rather than other income, △whether to combine profits and losses with other investment assets, and △whether to recognize carry-over deductions, etc.”
Blooming Beat Reporter Son Min [email protected]
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