Lim Kwang-hyun: "Preparing to Issue Virtual Asset Taxation Notice Next Month"

▲ National Tax Service Commissioner Lim Kwang-hyun answers lawmakers' questions during a parliamentary audit of the National Tax Service by the National Assembly's Strategy and Finance Committee held at the Government Complex-Sejong in Sejong City on the 13th.

National Tax Service Commissioner Lim Kwang-hyun stated that the agency is making preparations to issue a notice containing guidelines for virtual asset taxation next month.

During a parliamentary audit by the National Assembly's Strategy and Finance Committee today (the 13th), when People Power Party Representative Lim I-ja asked about the timing of the notice regarding virtual asset taxation, Commissioner Lim replied, "We are making preparations so that it can be done around November."

Representative Lim pointed out that taxation preparations are insufficient, noting that clear taxation standards have not been established for various types of virtual asset transactions, such as staking, airdrops, hard forks, and decentralized finance (DeFi).

In response, Commissioner Lim explained, "The economic and substantial relationship is more important than the transaction type or name," adding, "It is a matter of whether it constitutes a transfer or a loan."

He stated that airdrops and hard forks should be considered subject to taxation if they possess the characteristics of a transfer or a loan.

However, he added that certain aspects, such as staking, require consultation with the Ministry of Economy and Finance.

Strategy and Finance Committee Chairman Cho Seung-lae stated that the government must prepare on the premise that the system will be implemented unless the National Assembly decides to postpone the taxation, and requested that Commissioner Lim consult with the Ministry of Economy and Finance and report the plan for the notice during the comprehensive audit of the parliamentary inspection.

Earlier this morning, in response to a question from People Power Party Representative Park Soo-young regarding the preparedness for virtual asset taxation, Commissioner Lim stated, "We are preparing to execute it without a hitch."

In response to Representative Park's question asking whether the Ministry of Economy and Finance or the National Tax Service is the main entity responsible for taxation preparations, Lim answered, "Both must do it, and we are handling the systematic and practical aspects."

Regarding the number of people subject to taxation and expected tax revenue, he did not provide specific figures, stating, "Once the law takes effect, we must receive data and begin verification starting from the tax returns filed in May 2028."

Addressing criticisms that preparations for building virtual asset taxation systems at five major domestic virtual asset exchanges (Upbit, Bithumb, Coinone, DigitalX, and Gopax) are inadequate, he replied, "We are continuously consulting with the exchanges at the working level."

He explained that even when the Crypto-Asset Reporting Framework (CARF) for automatic cross-border exchange of digital asset transaction information is implemented, there are limits to capturing tax bases.

Commissioner Lim said, "Because virtual assets are such a new field, it is a challenge not only for our country but for tax authorities worldwide," adding, "Once CARF is implemented, a more advanced exchange of data will take place."

He further elaborated, "It is true that countries imposing taxes also face difficulties with parts that are hard to capture, such as peer-to-peer wallet transactions," and added, "We continue to discuss how to cooperate and make efforts to capture the tax base during meetings of tax commissioners, and it seems to be a problem that time must resolve."

(Photo: Yonhap News)

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