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PPP’s Choi Eun-seok Proposes 2-Year Delay to Crypto Tax, 50 Million Won Basic Deduction
Summary
- The proposed amendment to the income tax law would delay taxation on virtual-asset, or cryptocurrency, investment income until 2029 and introduce a tax exemption for annual income of up to 50 million won.
- The amendment would raise both the basic deduction and the minimum taxable threshold for virtual-asset investment income to 50 million won, while keeping the 20% tax-rate structure in place.
- The amendment would also introduce a loss carryforward deduction allowing losses from virtual-asset investment to be carried forward for up to five years and deducted from virtual-asset income.
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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-free threshold.
According to the National Assembly’s bill information system on November 2, Rep. Choi Eun-seok of the People Power Party on October 27 introduced an amendment to the income tax law 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 law, income from the transfer or lending of virtual assets is set to be taxed starting in January 2027. A 20% tax rate applies to the amount remaining after a 2.5 million won ($1,800) deduction from annual income. The amendment would change the start date to January 1, 2029, and raise both the basic deduction and the minimum taxable threshold to 50 million won ($36,100).
The bill would also establish a system allowing losses incurred from virtual-asset investment to be deducted from future gains. If deductible expenses exceed income in a given year and create 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, including trading records submitted by exchanges.
Choi cited tax fairness between stocks and virtual assets as the reason for the amendment. After the repeal of the financial investment income tax, capital gains from ordinary individual investors’ exchange trading of domestically listed shares are generally not taxed, while virtual assets remain subject to an annual deduction threshold of 2.5 million won ($1,800). That could leave investors facing different tax burdens.
He also argued that the current system needs improvement because it does not allow losses stemming from the high volatility of virtual assets to be carried forward into later tax years. Because investors can repeatedly move between gains and losses, the tax framework needs a mechanism to reflect that, he said.
Choi also cited shortcomings in the system for securing transaction data for taxation as grounds for delaying implementation. Transactions through overseas crypto exchanges or private wallets make it difficult to accurately verify acquisition costs, meaning more preparation is needed to ensure the reliability of taxation.
If the amendment passes the National Assembly, the start of virtual-asset taxation would be delayed to 2029, and a tax exemption for annual income of up to 50 million won ($36,100) and a five-year loss carryforward would be introduced.
