Taxation period October 2021 → 2022 → 2023, postponed twice… Reporting and payment will start from May 2024.
Opposition to the government… “It will hurt the acceptability of taxes” protests
The tax time on virtual assets has been delayed by one year from 2022 to 2023.
The implementation of the system has been delayed due to the fact that it is only a month ahead of the originally scheduled taxation due to the political circles ahead of next year’s elections.
The National Assembly’s Planning and Finance Committee held a plenary meeting on the 30th and voted to amend the tax laws, including the Income Tax Act.
◇ 20% tax on virtual asset income from next year… Tax filing and payment will start in 2024.
The amendment to the tax law dealt with on the same day contains the content of changing the taxation point for virtual asset income from January 2022 to January 2023.
Investors in virtual assets will not have to pay taxes on income from transferring or lending virtual assets until next year.
From 2023 onwards, tax at a rate of 20% must be paid on the transfer or rental income of virtual assets exceeding 2.5 million won (basic deduction amount), but the actual tax payment will start from May 2024, the following year.
This is because domestic residents must report and pay taxes on their investment income for the previous year in May of each year.
At this time, the total profit and loss is applied, which is taxed by adding up the income and losses from various virtual assets for one year.
For example, if an investor gains 10 million won from selling bitcoin but loses 5 million won in Ethereum, only 2.5 million won is taxed out of the remaining 5 million won, excluding the basic deduction amount.
In the case of virtual assets currently held, tax is not levied on the increase in the price before the implementation of taxation.
To this end, the government plans to introduce a proposed acquisition price so that investors can pay taxes on the more favorable of the actual acquisition price and the market price at the end of next year (average of prices announced by virtual asset operators).
For example, if the actual acquisition price of a virtual asset owned by an investor is 50 million won, and the market price is 100 million won at the end of next year, it means that the asset will be considered as acquired at 100 million won.
Assets acquired abroad and transferred to Korea are taxed based on the acquisition price at the time of acquisition, and additional taxation standards are set for virtual assets owned by non-residents in Korea.
◇ Taxation of virtual assets that have already been delayed twice… “It will hurt the acceptability of taxes.”
The government originally planned to start taxing virtual assets from October 2021 in the revised tax law announced last year, but the taxation time was delayed by three months to January 2022 during the passage of the National Assembly.
Since then, the taxation time has been delayed by another year from January 2022 to January 2023 at the National Assembly this year.
In over a year, the tax time has already been delayed twice.
The government was in the position that taxation should start next year as scheduled in terms of legal stability and policy reliability, but the ruling and opposition parties unanimously demanded a tax waiver ahead of next year’s presidential election, which ultimately failed to carry out the will.
Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki said at a plenary meeting of the committee on the same day, “The government has repeatedly stated that it is desirable to start taxing virtual assets from next year.” It’s built up,” he said.
It is interpreted that he adhered to the point that he could not agree to the National Assembly’s suspension of taxation on virtual assets.
As the National Assembly postpones the taxation of virtual assets by amending its own law, there are also concerns that future taxation may continue to be delayed.
Professor Kim Woo-cheol of the University of Seoul said, “It is not fair to defer taxation one month before the tax time, conscious of the objection or dissatisfaction of the taxpayer.” pointed out
Professor Kim added, “In a situation where financial capacity has recently deteriorated, we will continue to increase revenue and expand tax sources.
/yunhap news
