South Korea’s Rival Parties Reach Tentative Deal to Delay Virtual-Asset Tax by Two Years

South Korea’s ruling and opposition parties have tentatively agreed to advance a bill delaying taxation on virtual assets, or cryptocurrencies, by two years. The tax had been due to take effect next year.

Rep. Oh Gi-hyoung of the Democratic Party, the ruling party’s ranking member on the National Assembly tax subcommittee, told reporters after a meeting on November 11 that lawmakers had reached a consensus on delaying the virtual-asset tax.

Some procedural details are still under discussion, he said. The government proposed a two-year delay, and the ruling and opposition parties had no major differences.

Rep. Bae Jun-young of the People Power Party, the opposition party’s ranking member on the committee, said the government must prepare responsibly as the tax is deferred again.

He added that lawmakers would closely monitor whether the government is making a serious effort and how preparations are progressing.

Earlier, the government said on November 5 that it would postpone for another two years the taxation of income from transfers and lending of virtual assets, which had been scheduled to begin next year. Taxation of virtual-asset income was first introduced in a 2020 revision to the Income Tax Act and was originally set to take effect in 2022, but was deferred three times, to 2023, 2025 and 2027.

Still, the proposed amendment to the Income Tax Act containing the two-year delay was not approved on November 11. The measure was held up by the government’s opposition to raising the basic deduction for virtual-asset taxes and by continued disagreements among lawmakers over provisions including a rule requiring exchanges to submit trading data starting next year.

Oh said the tax subcommittee would make a final decision on the last day of deliberations. For now, he added, it is fair to say the tax has been pushed back by two years.