Lee Hyoung-il Says Government Will Carefully Decide on Crypto Tax; National Tax Service Notice Due by End-October

The South Korean government is continuing to gather views as it weighs whether to go ahead with taxation of virtual assets, or cryptocurrencies, now scheduled to take effect in January next year. The National Tax Service plans to finalize its tax-related notice by the end of October, but the government has not yet set its position on whether to grant another delay.

Lee Hyoung-il, deputy prime minister and finance minister, told a comprehensive parliamentary audit by the National Assembly’s Strategy and Finance Committee on Oct. 22 that the government would make its decision after carefully considering views from the industry, experts and lawmakers.

Questions about readiness for the tax continued during the hearing. Yoon Hu-deok, a lawmaker from the Democratic Party, said the government had repeated the same promise to prepare each time the tax was postponed. Taxation of virtual assets was approved in 2020 and has since been delayed three times. The current implementation date is Jan. 1, 2027.

The government recently reviewed market changes and tax conditions at a meeting with industry participants. Kwon Dae-young, the finance ministry’s first vice minister, met industry officials and experts on Oct. 20 and said the system had originally been built around spot trading when the framework was introduced in 2020, but related technology had advanced considerably since then. Lee said the meeting was part of the government’s effort to gather more views from experts and the industry before making a decision.

The notice needed for tax administration has not yet been finalized. Committee Chairman Cho Seung-rae said he had received materials from the government on its preparations and the notice, and officials reported it would be finalized by the end of October.

The ruling party leadership wants a conclusion within the year. Democratic Party leader Kim Min-seok said on the party’s YouTube program “Minti 07” on Oct. 22 that the issue should be settled this year. He added that he had proposed to Lee the previous day that the government conduct a final review and reach a conclusion, saying it was time to begin discussions on whether to proceed with taxation as scheduled or revise the system.