South Korea to Consider Bill Scrapping Crypto Tax for 13 Million Investors Today

South Korea’s National Assembly Planning and Finance Committee is expected to place a proposed amendment to the Income Tax Act on its agenda today during a full committee meeting at 1:00 a.m. UTC. The bill, if advanced, would abolish taxation on virtual asset gains, a move that could affect an estimated 13 million cryptocurrency investors in the country.

Bill Would Delete Virtual Asset Income Tax Clauses

According to a report from Edaily, the bill was introduced on March 19 by People Power Party lawmaker Song Eon-seok. The proposed legislation would delete existing clauses in the Income Tax Act that impose taxes on income derived from virtual asset transactions. If the committee places the bill on its agenda, it will be referred to the tax subcommittee for further deliberation.

The full committee meeting is expected to include key government officials, including Deputy Prime Minister and Finance Minister Koo Yun-cheol, Budget Minister Park Hong-keun, and Bank of Korea Governor Hyun Song Shin. Their attendance signals the high level of interest and potential impact of the proposed tax change.

Public Petition Adds Pressure

Adding to the momentum, a public petition calling for the abolition of virtual asset taxation has gathered support from more than 50,000 people. The petition is also set to be reviewed by the committee’s petition review subcommittee. A National Assembly official noted that both the tax subcommittee and the petition review subcommittee have not yet been fully formed. The discussion schedule will be set once all members are appointed and floor coordinators from both major parties agree on a timetable.

What This Means for Investors and the Market

The potential scrapping of the crypto tax comes after years of debate and multiple delays in implementing a taxation framework for virtual assets. South Korea originally planned to tax crypto gains starting in 2022 but postponed enforcement twice due to market conditions and regulatory concerns.

If the bill passes, it would represent a significant policy shift. Currently, the tax framework would have imposed a 20% tax on virtual asset gains exceeding a certain threshold. Abolishing the tax entirely could stimulate retail investment and trading activity in one of the world’s most active cryptocurrency markets.

However, the legislative process remains uncertain. The bill must clear the tax subcommittee, the full Planning and Finance Committee, and ultimately a vote in the National Assembly. The involvement of the petition review subcommittee adds a layer of public input that could influence lawmakers.

Conclusion

Today’s committee meeting marks a critical procedural step for the proposed abolition of South Korea’s virtual asset income tax. While the bill has bipartisan support from its sponsor and public backing, the path to final passage requires multiple approvals. Investors and industry observers will be watching closely as the tax subcommittee begins its work in the coming weeks.

FAQs

Q1: What does the proposed bill do?
The bill, introduced by lawmaker Song Eon-seok, would delete clauses in South Korea’s Income Tax Act that impose taxes on income from virtual asset transactions, effectively abolishing the crypto tax.

Q2: How many investors would be affected?
An estimated 13 million cryptocurrency investors in South Korea could be impacted if the tax is abolished.

Q3: What is the next step after today’s committee meeting?
If placed on the agenda, the bill will be referred to the tax subcommittee for detailed discussion. A separate petition review subcommittee will also review a public petition supporting the tax abolition. Both subcommittees must be fully formed before scheduling further discussions.