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[현장에서]Deferred taxation on virtual assets… Equity with Donghak and Seohak Ants

[이데일리 양희동 기자] The taxation of virtual assets such as bitcoin, which the government planned to impose capital gains tax (transfer tax) from next year, has been delayed by one year due to a recent parliamentary agreement between the ruling and opposition parties. Earlier, just 11 months ago, the ruling and opposition parties passed a bill to amend the Income Tax Act to classify profits from virtual assets as other income from January 2022 and tax it at a 20% tax rate on the amount in excess of 2.5 million won from December of last year and January 2022. At that time, the Korea Blockchain Association, etc. requested that the taxation time be deferred for one year and three months from October 2021, saying that it takes time to extract taxation data according to the enforcement of the Specific Financial Information Act (Special Provisions Act). However, the opposition and opposition parties concluded with a three-month grace period, significantly shorter than the industry’s request, and confirmed the taxation of virtual assets in 2022.

Bitcoin image. (Photo=Edaily DB)

However, ahead of the presidential election in March next year, the government overturned the previous decision and decided to defer taxation for an additional year despite the opposition from the government, conscious of the votes of investors in the 2030s, centered on the 2030 generation, with 5 million politicians. The problem is that the politicians are not only delaying the taxation period for virtual assets, but are also pushing for a plan to increase the non-taxation limit from the current 2.5 million won to 50 million won. The government will impose full taxation of capital gains tax on financial investment income through domestic stocks from 2023, making it equal to the 50 million won set as the non-taxable limit. This is a method that treats virtual asset income as financial investment income and provides the same benefits as domestic stocks.

Experts point out that domestic stocks, foreign stocks, and virtual assets each have their own taxation purposes and principles, so the standards should not be artificially changed according to political intentions.

A virtual asset is defined as an electronic token (including any rights related thereto) that has economic value and can be traded or transferred electronically in the Special Act. It is different from stocks and bonds that are the subject of financial investment income. In particular, the domestic stock market plays a key role in supplying business and investment funds to Korean companies through initial public offerings (IPOs). In addition, unlike ICOs, which are not legally allowed in Korea due to opaque procedures, IPOs must also pass strict screening by the financial authorities.

Under this circumstance, expanding the tax-free benefit to 50 million won in the same way as financial investment income is also concerned about reverse discrimination against stock investors. Donghak ants will have to continue to pay a transaction tax (0.15%) in addition to the transfer tax after 2023, which may give excessive benefits to investment in virtual assets without a transaction tax.

The issue of equity with Seohak ants who invest in foreign stocks such as the United States is also discussed. In the case of overseas stocks, like virtual assets, the tax-free limit is 2.5 million won and there is no transaction tax, but tax is levied every year without a grace period. If it is decided to expand the tax exemption on virtual assets, it cannot be ruled out that it will cause a backlash from Seohak ants.

The reason that the tax that the state imposes on its citizens is justified is because there are clear and agreed upon principles. If the principle is shaken by being conscious of the vote, it can cause a backlash from another vote. What the 2030 generation wants is ‘fairness’, not ‘preferentiality’.

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