South Korea plans to release detailed guidelines on virtual asset taxation before the end of the year, according to Lee Hyoung-il, the nominee for deputy prime minister and finance minister. The guidance is meant to come ahead of the currently planned Jan. 1 start for crypto taxation.
Lee also said the existing approach of classifying income from virtual assets as “other income” should be maintained. He argued that this structure is more taxpayer-friendly because it allows for a basic deduction and a single tax rate, while also keeping compliance costs lower than a comprehensive income tax regime.
Nominee outlines year-end timetable
Lee’s comments set out a near-term timetable for how the government intends to prepare for the rollout of crypto taxes. Rather than changing the implementation schedule described in the current framework, he said the more detailed rules for taxpayers would be announced before year-end.
That timing would give market participants and taxpayers further clarification shortly before the planned Jan. 1 start date. The source article did not specify the contents of the guidance beyond saying it would cover virtual asset taxation in detail.
Support for current tax classification
Lee said the present framework that treats virtual asset income as other income is appropriate. In his view, that classification supports a simpler structure than folding crypto gains into broader comprehensive income taxation.
He said the current setup would provide features that are relatively favorable to taxpayers, including a basic deduction and the use of a single tax rate. He also said this approach would reduce the compliance burden compared with a comprehensive income tax system.
Fairness argument across asset classes
Lee also framed crypto taxation as a matter of tax fairness across different types of assets. He noted that capital gains and transaction taxes already apply in other parts of the market, including to major shareholders, overseas stocks, and unlisted shares.
By presenting virtual asset taxation alongside those existing rules, he indicated that taxing crypto income would help align treatment across asset classes rather than leave one category outside the broader tax framework.
Broader tax issues left open
On whether South Korea should move toward a capital gains tax that includes the financial investment income tax, Lee said that question should be reviewed only after financial markets are sufficiently stable.
He took a more cautious line on inheritance and gift taxes tied to virtual assets as well. According to the source article, he said more public input and broader social discussion are needed because opinion remains split between reducing the tax burden and maintaining tax fairness.
For now, the clearest confirmed next step is the release of the government’s detailed crypto tax guidelines before year-end, ahead of the planned Jan. 1 implementation.
Source: en.bloomingbit.io