KDA calls for the establishment of infrastructure, such as legal systems, “of course, the suspension of taxation of virtual assets for two years”

KDA CI. Photo = KDA

The Korea Digital Asset Business Association (KDA) announced on the 26th that the decision to postpone income tax taxation on the transfer and rental of virtual assets for two years is not only natural, but rather late, considering that it is a promise of the 3.9 last presidential election, and encouraged the establishment of related infrastructure.

KDA “the Income Tax Act, Enforcement Decree, and Enforcement Rules were amended during the grace period to enable fair and transparent taxation while reflecting international consistency, equity with gold investment tax, taxpayer acceptance, and virtual asset characteristics based on the principle of legality tax taxation is based on law. He was ordered to establish precisely legal systems and systems, such as overhauling the tax system of tax authorities and exchanges.”

Since its establishment in April last year, the KDA Korea Digital Asset Business Association has devised policy alternatives through over 20 forums, including measures to improve the issuance of real-name accounts, measures to establish a virtual asset committee dedicated to’ r ministerial level, and measures to establish Korean virtual assets legislation He makes policy proposals to the opposition parties and opposition parties, the National Assembly, and government authorities.

In addition, 14 coin market exchanges are participating, including Coredocs, Probit, Gdac, Borabit, Flattype Exchange, Btrade, BTX, Coinncoin, Bitcmon, Foblegate, Oasis, Prabang, Qbit, and Tanntan.

On 23 December, the ruling and opposition parties agreed to postpone taxation of income tax on the transfer and rental of virtual assets originally planned for January 1 next year for two years and start taxing them from January 1, 2025. It was decided in the plenary meeting session.

It was proposed to postpone the transfer of virtual assets and rental income tax for 2 years by the Ministry of Strategy and Finance in September to amend the Income Tax Act, namely to postpone the income tax of virtual asset transactions for 2 years. As the agreement between the deferred judgment and opposition parties, 7 million virtual asset investors were put on the front with concern about whether they would be taxed from January 1 next year, just a week away.

The current Income Tax Act specifies a tax rate of only 22%, including local tax, for the transfer of virtual assets and rental income with a basic deduction of over KRW 2.5 million from January 1 next year. In addition to this, there are serious repercussions such as the anticipated outflow of domestic investors abroad.

With the two-year delay of virtual asset transfer and rental income tax taxation by the opposition parties and opposition parties, KDA conducted enough research review and discussion during the grace period in line with the presidential election promise of ‘tax after maintenance of the system first’, and exchange DB maintenance, etc., to set up the taxation infrastructure exactly.

First of all, KDA emphasized that the virtual assets bill, which is currently being delayed by the National Assembly, should be handled by the National Assembly this year.

The enactment of the Virtual Assets Act stems from the fact that the demand for institutionalization explodes at home and abroad, such as the regulation of unfair practices, due to the crash of lunaterra, the bankruptcy of FTX, the world’s third largest exchange, and the delisting of Wemix, a representative virtual asset in Korea 3.9 The President’s Election Promise’ and at the same time, considering the fact that both parties have announced that the regular legislative target of the National Assembly this year is for the public welfare economy bill, they urge the National Assembly this year to pass it in order to fulfill the promise with the people.

In accordance with the principles of ‘there is tax where there is income’ and ‘the principle of tax legitimacy that taxation is only possible according to the law’, ensure international consistency, ensure fairness with the gold investment tax, consider the taxpayer’s acceptance, and full considering the characteristics of virtual assets, the income tax law and Sub-regulations such as enforcement decrees and enforcement rules were also ordered to be reviewed.

KDA is financial investment income given that the current Income Tax Act defines the transfer of virtual assets and rental income as other income, which is already charged as capital gains tax in English-speaking countries such as the United States, the United Kingdom, Canada and Australia, and that it is a promise from the last presidential election 3.9 argue that it should be amended.

In order to adhere to the ‘principle of net income taxation’, the carry-over deduction from total profit and loss has already been ‘applied as a five-year system’ to financial investment income tax, including stocks, and Commonwealth countries such as The United States, the United Kingdom, Australia, and Canada have already acted ‘without a time limit’ ‘It should be presented considering the reality that is being done,’ he said.

In addition, along with rental income (landing service, etc.) from virtual asset stacking and lending platform deposits, virtual assets by mining as proof-of-work (POW) and proof-of-stake (POS), virtual assets by airdrop and hard fork is taxable In addition, he added, considering that the concept has not yet been established internationally, the international negotiation process should be reviewed sufficiently to establish a taxation plan.

In addition, as a result of the fact-finding survey on the virtual asset industry in the first half of this year published by the Financial Services Commission, the fact that the youth generation of 2030 accounts for more than half at 55%, and that the youth generation of 2030 is the weakest economically, the opposition parties and the opposition parties promote various wealth formation policies and this point needs to be reviewed in the process of looking for alternatives to taxation.

In particular, given that the taxation of virtual assets has been suspended twice as a result of administrative and legislative omissions by the government and the ruling opposition parties, academia, industry, associations, the government, and the National Assembly should reflect the views various through a transparent process to form consensus in advance It was proposed to form and operate a national virtual asset taxation committee.