PPP Lawmaker Choi Eun-seok Proposes 2-Year Delay to Crypto Tax, 50 Million-Won Basic Deduction

A bill has been introduced to delay taxation on investment income from virtual assets, or cryptocurrencies, by two more years and sharply raise the tax-exempt threshold.

According to the National Assembly's bill information system on November 2, People Power Party lawmaker Choi Eun-seok on October 27 sponsored an amendment to the Income Tax Act that would delay the start of virtual-asset taxation to 2029. The bill also includes a larger basic deduction and a loss carryforward for investment losses.

Under the current Income Tax Act, income from the transfer or lending of virtual assets is subject to taxation starting in January 2027. A 20% tax rate applies to the amount remaining after an annual deduction of 2.5 million won. The amendment would change the tax start date to January 1, 2029, and raise both the basic deduction and the minimum taxable threshold to 50 million won.

The bill would also establish a system allowing losses from virtual-asset investments to be deducted from future gains. If deductible expenses exceed income in a given year and generate a net loss, that loss could be deducted from virtual-asset income over the following five years. The provision would apply only to losses verified through objective evidence such as trading records submitted by exchanges.

Choi cited tax fairness between stocks and virtual assets as the reason for the amendment. After the financial investment income tax was scrapped, capital gains from exchange-traded domestic listed stocks by ordinary retail investors are generally not taxed, while virtual assets remain subject to an annual deduction threshold of 2.5 million won, creating a gap in tax burdens between investors.

He also argued that the current system needs improvement because it does not allow losses to be carried into later tax years despite the sharp volatility typical of virtual assets. Investors can repeatedly experience gains and losses, making it necessary for the tax system to reflect that reality.

Choi also pointed to weaknesses in the framework for securing transaction data needed for taxation as grounds for delaying implementation. Transactions made through overseas virtual-asset exchanges or private wallets make it difficult to accurately verify acquisition costs, he said, underscoring the need for more preparation to ensure the reliability of taxation.

If the bill passes the National Assembly, the start of virtual-asset taxation would be pushed back to 2029, while annual income of up to 50 million won would be exempt from tax and a five-year loss carryforward would be introduced.