Government and Ruling Party Consider Deferring Virtual Asset Investment Income Tax

The government and ruling party are considering postponing the ‘virtual asset investment income tax’ set for next year due to the lack of a complete taxation system and infrastructure, and the ongoing abolition of the financial investment income tax. The Ministry of Strategy and Finance is working to include the deferral in the upcoming tax law amendment bill, which would delay the 20% tax on virtual asset income (after a basic deduction of 2.5 million won) initially planned for January 1. The ruling party is pushing for a three-year deferral, with a proposed bill to move the tax start date to January 1, 2025. This aligns with the People’s Power’s election pledge. Despite the upcoming ‘Virtual Asset User Protection Act’ on July 19, further legislation is needed for detailed tax laws. Concerns include taxing assets popular with young people and the gold investment tax’s abolition, with the government considering keeping both taxes aligned. Deputy Prime Minister mentioned in March that the deferral is still under consideration as they prepare the tax law amendment.