Virtual Asset Taxation Delayed Two Years in Sight...Timing of US Information Exchange Considered

Virtual asset taxation, which was scheduled to begin next year, is shaping up to be delayed by two years in implementation.

Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il held a briefing on virtual asset income taxation at the Government Seoul Building on the 5th, announcing that the government will pursue a plan to defer virtual asset income taxation, originally scheduled to begin next year, for two years.

After reviewing opinions from all sectors, the government has taken the position that it has converged on the view that if taxation is implemented immediately, given that information exchange on virtual assets with the United States will take place starting in 2029, the domestic market could face relative disadvantages compared to overseas markets.

Additionally, considering that the institutional foundation of the digital asset industry is expected to undergo significant changes following the enactment of the 'Digital Assets Act' and other factors, it was determined that implementation after an additional two-year preparation period would be desirable.

The adjustment of the implementation timeline upholds the fundamental tax principle of 'taxation where income exists,' while explaining that it aims to enhance the effectiveness of taxation on domestic and overseas transactions, improve fairness among taxpayers, and establish a reliable and stable tax base.

At the same time, a 'Digital Asset Taxation Public-Private Joint Working Group' will be established to promote rationalization of the tax system and expansion of tax infrastructure, and efforts will be accelerated to enact the Digital Assets Act while ensuring full protection of digital asset users.

The government emphasized that it will work closely with the National Assembly to advance necessary legislation and carefully prepare tax standards and enforcement systems to ensure fair taxation.