A national petition calling for the repeal of cryptocurrency taxation has secured enough support to be formally taken up by the National Assembly.
According to financial industry sources on the 21st, the "Petition on the Repeal of Virtual Asset Taxation" posted on the National Assembly's electronic petition board met the threshold for referral to a standing committee after gathering more than 50,000 signatures in just eight days. The petition will be assigned to the Strategy and Finance Committee, which oversees the Ministry of Economy and Finance and the National Tax Service, and will undergo review before a decision is made on whether to refer it to a plenary session or dismiss it.
The most prominent reason cryptocurrency investors are demanding the repeal is the issue of equity with the stock market. "While the financial investment income tax is being abolished and tax burdens eased for stocks, imposing a separate tax exclusively on cryptocurrencies runs counter to fairness," the petitioner said. "The current cryptocurrency taxation system requires fundamental reconsideration, not merely a partial revision or deferral."
Under the current system, domestic stocks are not subject to capital gains tax unless held by major shareholders, whereas cryptocurrencies are set to be taxed at 22 percent, including local taxes, on annual gains exceeding 2.5 million won. The fact that loss carryforwards are not permitted despite the market's high volatility is also cited as a key source of investor backlash.
Experts agree that cryptocurrency taxation is premature. The United States, which accounts for a large share of global cryptocurrency trading volume, is scheduled to join the Crypto-Asset Reporting Framework (CARF) in 2029, meaning a gap of at least two years could exist in tracking transactions on overseas exchanges and personal wallets. Taxation standards for new types of income such as staking, airdrops, and decentralized finance (DeFi) also remain unclear, according to assessments.
Oh Moon-sung, a professor of tax accounting at Hanyang Women's University and chairman of the Korean Tax Policy Association, said, "There is no guarantee that information sharing will actually proceed smoothly, not only with the United States but even among CARF member countries." He added, "In the end, criticism is inevitable that the government is only catching investors it can already identify through domestic exchanges — the so-called 'fish in a fishbowl.'" He continued, "Major investors will eventually find ways to escape by using overseas exchanges or personal wallets. Given that many investors in the current cryptocurrency market are sitting on losses, the actual revenue impact will be limited." ▷See this newspaper's May 15 edition, Page 9
