Democratic Party Proposes Raising Tax Exemption Limit for Virtual Asset Earnings

The Democratic Party of Korea is advocating for an increase in the tax exemption limit for virtual asset earnings to 50 million won (approximately $35,768). This move signals their intention to uphold the scheduled taxation, which is set to commence next January. The proposal, led by Representative Jeong Tae-ho, aims to raise the exemption threshold from 2.5 million won to 50 million won, thereby reducing resistance by exempting small investors while adhering to the planned implementation of taxation.

The revised income tax law, which is set to take effect next year, requires a tax of 22 percent, including local taxes, on annual income exceeding 2.5 million won from virtual asset investments. The bill proposed by Representative Jeong also includes provisions allowing up to 50 percent of the total transfer price to be used as the acquisition price if the actual acquisition cost cannot be verified under the government's proposed plan.

People Power Party Opposes Taxation with Raised Exemptions

The People Power Party vehemently opposes the implementation of the tax with raised exemptions. Party leader Han Dong-hoon criticized the plan, stating, "This isn't a fight against us or the government. It's a fight against 8 million investors, including many young people." Han emphasized, "The reason for postponing taxation by two years is to reduce the burden on young people, who are significant investors in virtual assets, and to support their asset formation. We stood with public sentiment to abolish the financial investment income tax and will do the same this time." Floor Leader Choo Kyung-ho added, "Our stance is to stick to the two-year deferment."

The Tax Subcommittee of the National Assembly's Planning and Finance Committee has put discussions on virtual asset taxation on hold as the ruling and opposition parties have yet to narrow their differences. The Democratic Party is determined to push its amendment forward if the current deadlock continues.