Crypto Taxation Delayed Again... Plan to Allow Tax Deductions for Losses Over Next 3 Years

[Anchor]

The government is pushing to postpone the taxation of virtual asset income, which was scheduled to begin next year, by another two years. As this marks the fourth delay if approved, criticism is mounting over whether the government's tax principles can be trusted.

Reporter Yoo Soo-Hwan has the details.

[Reporter]

The government announced that it is pursuing consultations with the National Assembly to postpone the virtual asset income tax, originally set for January next year, to 2029.

[Lee Hyung-il / Deputy Prime Minister and Minister of Economy and Finance: I take it very seriously that, following three previous delays in implementing the taxation, I must once again propose deferring it.]

The government also plans to introduce a system where taxes are calculated based on annual profits, but if investors suffer losses, those losses can be deducted from profits generated over the following three years.

For example, if an investor loses 10 million won in the first year after taxation begins and earns 10 million won the following year, no tax will be levied since there are ultimately no net earnings.

The government explained that this measure takes into account the characteristics of virtual assets, which experience high price volatility.

As for the background behind the tax postponement, it cited equity with overseas exchanges.

Since the timing for exchanging virtual asset transaction information with the United States is set for 2029, taxing transactions before then could put users of domestic exchanges at a relative disadvantage.

In addition, the government plans to enact a Digital Asset Act to establish standards for provider management and user protection, while overhauling the taxation system accordingly.

The government decided to form a consultative group consisting of experts, industry insiders, and relevant ministries to discuss detailed taxation criteria and improvements for reporting convenience.

The government plans to announce detailed taxation standards in the first half of 2028.

The virtual asset taxation, initially planned to take effect in 2022, has been postponed three times so far, and if this delay bill passes the National Assembly, it will be the fourth postponement.

(Video Editing: Lee Sang-min)
※ Please note: This article was translated by AI and may contain errors.