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PPP Lawmaker Says South Korea's Crypto Tax Infrastructure Falls Short, Calls for Legislative Review

Doohyun Hwang

Summary

Rep. Park Soo-young said South Korea's National Tax Service is severely underprepared to build the tax infrastructure needed for next year's virtual asset taxation.
He said the tax agency can track data only from the country's five largest exchanges, raising concerns about a tax blind spot if investors move to overseas exchanges.
He said imposing taxes only on virtual assets after scrapping the financial investment income tax would violate tax fairness, and pledged to revisit the issue during the legislative process.

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Rep. Park Soo-young of the People Power Party speaks at the "Virtual Asset Taxation: Emergency Review Forum" at the National Assembly Members' Office Building on May 7. Photo: Hwang Du-hyun, Blomingbit reporter

Rep. Park Soo-young of the People Power Party said South Korea's National Tax Service is severely underprepared to implement taxation on virtual assets next year, warning of major blind spots if investors shift trading to overseas exchanges.

Speaking at an emergency forum on virtual-asset taxation at the National Assembly Members' Office Building on May 7, Park said the tax authority's infrastructure and systems were not ready.

After recently meeting with the chiefs of South Korea's five biggest virtual-asset exchanges, Park said he concluded that the National Tax Service was not properly prepared. The agency commissioned an integrated taxation system only in March, he said, casting doubt on whether it can complete construction and testing in time for full operations. Any disruption in the early stage of implementation could directly damage trust in the government.

Park also pointed to institutional loopholes and the risk of investors shifting elsewhere. While the National Tax Service says it can track data from the country's five largest exchanges, it has no effective countermeasure if investors move to overseas platforms such as Binance or to smaller exchanges, he said.

He also argued that taxing only virtual assets after abolishing the financial investment income tax would violate tax fairness. At a time of high inflation and rising home prices, such a move could cut off a ladder for young people trying to build assets through crypto, he said.

Park added that he would closely review views presented by academics and experts at the forum and, as chair of the tax subcommittee, actively reflect them in the legislative process.