South Korea’s National Assembly Budget Office has recommended changes to the country’s upcoming digital-asset tax regime before it takes effect in January. The proposals would soften parts of the current framework by letting investors use losses over multiple years and by lifting the basic deduction above the level now set in law.
In its report, the office said digital-asset transfer losses should be allowed to carry forward for up to five years. It also argued that the annual basic deduction should be increased from 2.5 million won to at least 6 million won.
Loss relief and a higher deduction
The carryforward proposal addresses a key limitation in the current system. As it stands, losses recorded in one year cannot be used to offset gains in the following year, which can leave taxpayers facing bills that do not reflect their overall multi-year investment results.
By recommending a five-year carryforward period, the budget office is effectively calling for treatment closer to other asset classes where losses can be recognized over time. Its report also said the existing annual basic deduction is too low and should be raised to no less than 6 million won before the tax begins to apply.
How the report treats staking, lending, forks and airdrops
The budget office also set out suggested tax treatment for several common crypto-related income categories. It proposed that rewards from staking and lending be treated as rental income and taxed at 22%.
For tokens created through hard forks, the report said taxation should not occur immediately upon issuance. Airdrops, however, should continue to be classified as other income under the approach outlined in the report.
Domestic exchanges and capital outflow concerns
Another recommendation focused on where trading activity takes place. The report suggested lower tax rates or tax credits for transactions conducted on domestic exchanges.
According to the budget office, such measures could help prevent capital outflows and make it easier for authorities to capture taxable income. The proposal stops short of saying these changes have been adopted, but it adds to the broader policy debate over how to implement digital-asset taxation without pushing activity offshore.
What happens next
The tax is still scheduled to begin in January, but administrative details are still being discussed. The National Tax Service plans to start talks in October aimed at issuing an administrative notice on digital-asset taxation.
That means the budget office’s recommendations arrive at a critical point in the policy process. Whether the government adopts all, some, or none of the proposed changes, the next confirmed step is the National Tax Service’s October discussions on the rules that will guide implementation.
Source: en.bloomingbit.io