Ruling Party Virtually Confirms Postponement of Virtual Asset Taxation... 'Digital Asset Management and Supervision Agency' to Be Established by November Legislation

Nowungrae, Director of the Democratic Research Institute, "Party's Position Confirmed... Virtual Asset Taxation to be Implemented from 2023"

[Asia Economy Reporter Oh Ju-yeon] The Democratic Party of Korea has effectively confirmed the party's stance to postpone the taxation of virtual assets by one year, as it decided to implement the government's planned virtual asset taxation from January 2023.

On the 3rd, Roh Woong-rae, head of the Democratic Research Institute, said in a phone interview with Asia Economy, "The party's position has been settled for now," adding, "Taxation on virtual assets should be applied from 2023 under the same conditions as the taxation timing for other financial assets." This aligns with the statement made by Lee Jae-myung, the Democratic Party's presidential candidate, in a media interview last May, where he mentioned that "the timing should coincide with 2023, when capital gains tax on stocks begins."

[Image source=Yonhap News]

Roh emphasized, "It is difficult to accept taxing only virtual assets in advance," and added, "Since the taxation infrastructure is not yet established, taxing next year would also be unfair." He further stated, "Institutionalizing virtual asset transactions should come first, followed by taxation."

The Democratic Party also plans to reflect the industry's request to classify virtual assets as 'financial investment income' for taxation purposes. Previously, the Ministry of Economy and Finance had taken the position of treating virtual assets as intangible assets and taxing them as 'other income.'

Roh said, "For market protection, the supervisory body should not be the 'Financial Supervisory Service' but a separately established 'Digital Asset Management Supervisory Agency (tentative name)' to manage and supervise virtual assets."

He added, "We are preparing legislation to establish the Digital Asset Management Supervisory Agency separately," emphasizing, "We will legislate the establishment of the Digital Asset Management Supervisory Agency within this month."