South Korea’s Democratic Party Fails to Decide on Crypto Tax Delay, Says More Discussion Needed

South Korea’s Democratic Party held a party-government consultation on whether to implement taxation on virtual assets, or cryptocurrencies, but failed to reach a conclusion. Party officials remain divided on the issue.

After the meeting at the National Assembly Members’ Office Building on October 28, Democratic Party lawmaker Oh Gi-hyung told reporters that some participants argued the tax should take effect after having been postponed three times, while others said several issues still needed to be addressed. He said the party would conduct further review.

Discussions centered on the state of institutional preparations for crypto taxation and changes in market conditions. Tax fairness and the need to enact a Basic Digital Asset Act were among the main issues raised.

Oh said transaction data from domestic exchanges could be secured through regulatory improvements, but more thought was needed on how to obtain information from overseas exchanges. Participants also called for additional measures to address the collection of offshore trading data and concerns over tax fairness.

The party also plans to review the tax framework for crypto derivatives and whether to introduce loss carryforwards. Oh said there were views that the tax system should be reorganized on the premise of a Basic Digital Asset Act, including how crypto derivatives should be classified. He added that participants also raised the possibility of considering loss carryforwards.

Oh declined to specify when the party would make a final decision. He said the party would keep various options open, carry out further review and then make a final judgment.