Virtual Asset Taxation Postponed by One Year... Hong Nam-ki "Oppose if You Want, But Comply Once Decided"

National Assembly Budget Committee Eases Capital Gains Tax Threshold on Single Home Sales from 900 Million to 1.2 Billion Won

Deputy Prime Minister for Economic Affairs Hong Nam-ki is attending the plenary meeting of the Planning and Finance Committee held at the National Assembly on the 30th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Sejong=Asia Economy Reporter Son Sun-hee] The National Assembly has postponed the taxation of virtual assets, originally scheduled to be implemented next year, by one year to 2023. This outcome reflects the alignment of interests between the ruling and opposition parties aiming to capture the youth vote ahead of next year's presidential election. Although the government has consistently opposed the tax deferral, it was unable to block the bipartisan agreement.

On the 30th, the National Assembly's Planning and Finance Committee approved an amendment to the Income Tax Act reflecting this change. Initially, a 20% tax rate was to be applied from January 1 next year on profits exceeding the basic deduction of 2.5 million KRW per year from capital gains on virtual assets, but this has been postponed to January 2023. Virtual asset investors will actually pay taxes in 2024 on capital gains realized from 2023 onward.

However, during the passage of the amendment, the government repeatedly expressed opposition. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, reiterated on the day, "We have repeatedly stated that it is desirable to have a system in place for taxation and to start taxing from next year." Nevertheless, he added, "Since legislative amendments are the prerogative of the National Assembly, if the ruling and opposition parties decide this way, the government should accept and implement the legislation." This shows that while the government had to respect the legislative authority of the National Assembly based on bipartisan agreement, it left a record of opposition until the very end.

On the same day, the National Assembly also passed an amendment to the Income Tax Act easing the capital gains tax exemption threshold for first-time single-homeowners from 900 million KRW to 1.2 billion KRW.

Regarding this, Deputy Prime Minister Hong expressed concern, saying, "I am very worried that adjusting the deduction amount might stir instability in the real estate market," and added, "I think it is necessary to be cautious about the timing." However, he also noted, "Ultimately, it is a decision for the National Assembly."

This content was produced with the assistance of AI translation services.