South Korean lawmakers urge delay of cryptocurrency taxation

South Korean lawmakers from both the ruling and opposition parties are calling for a delay in the scheduled January 2027 taxation of virtual assets, arguing that the necessary legal and technical infrastructure is not yet in place.

Min Byung-deok, a senior official of the Democratic Party of Korea, proposed that taxation should only commence after the passage of the Digital Asset Basic Act. He highlighted several critical gaps, including the lack of parity between domestic and overseas exchange users. Since the Crypto-Asset Reporting Framework (CARF) will not begin exchanging data until 2027, Min warned that taxation starting in January 2027 could unfairly target only domestic investors, potentially driving capital to foreign exchanges.

Additional concerns raised include the absence of a loss carryforward system. Under current proposals, investors cannot offset losses from one year against profits in the next, which Min argues is inconsistent with practices in the US and UK. He also emphasized the need for clearer standards for determining acquisition costs to prevent unfair tax burdens.

Members of the People Power Party have also expressed caution, describing the current timing as premature. While the government and the National Tax Service currently maintain plans to proceed with the January 2027 implementation, the growing consensus among major political figures suggests that the timeline for taxation may face significant legislative debate in the National Assembly.