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South Korean Democratic Party lawmaker Min Byoung-dug said cryptocurrency taxation should be implemented only after a basic digital asset law is passed and the systems and infrastructure needed for taxation are in place, Newsis reported from a forum held in Seoul on Oct. 30.
Min said the proper sequence was to first pass a digital asset framework law aimed at establishing basic market order and investor protection, then complete the institutional and infrastructure requirements for taxation before enforcing the tax. Min added that Min agrees with the principle that income should be taxed and digital assets should not be an exception, while also saying criticism that South Korea moves slowly on legislation but quickly on taxation should be taken seriously.
Min also raised the need to introduce tax-loss carryforwards. Under the current virtual asset tax system, there is no provision allowing losses incurred in one year to be carried forward and deducted from gains in the following year. Min said if an investor loses 10 million won in the first year and earns 10 million won in the next, there is effectively no real profit across the two years, and taxing only the second year’s gain separately would be widely seen by taxpayers as unfair. Min added that allowing losses to be carried forward for a certain period under virtual asset taxation should be considered, according to Newsis.