Lee Hyung-il, nominee for Deputy Prime Minister and Minister of Economy and Finance, stated that virtual asset taxation should proceed as scheduled starting next year, sparking strong backlash from the industry and investors. Concerns are also raised that classifying it as miscellaneous income will require investors to file comprehensive income tax returns annually, potentially creating countless criminals. The public petition calling for a postponement of virtual asset taxation has surpassed 50,000 signatures, and the industry is responding by preparing joint opinion materials.
According to related industry sources on the 14th, the nominee ignited controversy over virtual asset taxation by stating in his written response to the National Assembly confirmation hearing held the previous day that "it would be desirable to implement taxation as scheduled from 2027 in accordance with basic tax principles."
Virtual assets were first included in the taxable scope following a revision of the Income Tax Act in December 2020, but implementation was repeatedly postponed due to reasons such as the lack of a taxation framework, and has now been delayed until January next year. Since the proposed tax reform plan does not include a postponement measure, taxation is set to proceed as scheduled starting next year. If virtual asset taxation is implemented, investors earning annual profits of 2.5 million won or more from virtual asset investments will be required to pay 22% of their income as tax (20% miscellaneous income tax and 2% local income tax).
Backlash is coming not only from the virtual asset industry but also from investors. The petition titled "Petition for a two-year postponement of coin taxation," which was posted on the National Petition platform at the end of last month, has received support from approximately 50,000 people. Through the petition, investors argue that "coin taxation should be postponed by two years to establish the necessary infrastructure before proper taxation is implemented."
While there are numerous grounds for criticism, including fairness concerns compared to the postponed financial investment income tax and inadequate taxation infrastructure, the industry's core opinion is that investor harm is the most pressing concern.
Virtual asset income is classified as miscellaneous income, requiring investors to file separate reports and pay taxes during the annual comprehensive income tax filing period. While transactions on domestic virtual asset exchanges such as Upbit and Bithumb can be resolved easily, the problem lies in investors using multiple overseas virtual asset exchanges. Investors must collect transaction information distributed across various exchanges themselves, calculate profits and losses, and report them each time. The main investor demographic is the 2030 generation, who are not accustomed to tax reporting or payment, and since they must gather and report relevant data individually, this could create countless defaulters.
A virtual asset industry representative stated, "Investors using only domestic exchanges may face no issues, but those using multiple overseas exchanges will have to compile transaction records in Excel files themselves and calculate income," adding, "It is extremely complicated and cumbersome, leading many to abandon tax reporting, which will ultimately result in the appearance of countless defaulters."
The representative continued, "The National Tax Service must be able to verify taxpayers' reports by having full access to transaction records from major overseas exchanges, but the infrastructure is currently inadequate," noting that "if blind spots emerge, fairness issues in tax payment between users of domestic and overseas exchanges could arise."
Critics also point out that while virtual asset taxation has been postponed multiple times, the government has failed to properly prepare the taxation framework infrastructure or related systems. Another representative stated, "The industry does not oppose taxation itself but argues that it should be implemented properly by considering factors such as tax classification, taxation criteria, infrastructure development, and consistency with relevant laws like the Digital Asset Basic Act."
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