Virtual Asset Tax to Be Implemented in 2027, Emerging as a Key Issue in National Assembly Audit

The taxation of virtual asset income has emerged as a major issue in the National Assembly's audit by the Finance and Economy Planning Committee, ahead of its implementation in 2027. Discussions are expected to focus on tax equity, loss carryforward deductions, and the capture of overseas transactions. The National Assembly's Legislative Research Service posed the question, "Is it the right time to tax virtual asset income?" The virtual asset income tax system was introduced in December 2020, with a separate tax rate of 20%, and is scheduled to be implemented in 2027. Given the current situation where the financial investment income tax has been abolished, there may be discussions on whether it is equitable to tax only virtual asset income separately. The absence of loss carryforward deductions is also a contentious point, with opponents highlighting inconsistencies with the principle of taxing net income. The issue of whether taxation can capture transactions on overseas exchanges and DeFi platforms has also been raised. Kim Tae-kyung, a legislative researcher, mentioned the need to reconsider the design of the system. Additionally, the reform plan for real estate taxation will be addressed in the audit, with the government planning to increase the tax burden on ultra-high-value homes and shift the tax structure towards actual residence. The budget for next year is set at 820.9 trillion won, with the government advocating for the necessity of expansionary fiscal policy. The national audit will take place over three weeks starting from October 6.

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