Korea's finance minister told the National Assembly the tax on virtual assets starts in January as scheduled, and that the loss carryforward question comes afterwards

Koo Yun-cheol was asked on Wednesday whether Korea would put the virtual asset tax off again.

The Deputy Prime Minister and Minister of Economy and Finance was at a plenary session of the National Assembly's Planning and Finance Committee, and the question came from Kim Sang-hoon of the People Power Party. Lee Jung-hoon at the Seoul Economic Daily reports the answer: the government is proceeding with taxation from next year as scheduled, the current deferral runs only to the end of this year, and anything that needs improving will be dealt with after the tax is in force rather than before.

The argument about losses

Kim's objection was mechanical rather than political.

Income from virtual assets is classified as other income. That category carries no carryforward of losses, so a loss in one year cannot be set against a gain in the next. Kim put the case in figures: lose 10 million won this year, make 5 million won next year, and tax is still due on the 5 million even though the two years together are a loss.

Koo did not dispute it. He answered that stock investment does not allow carryforward either, that classifying the income as other income brings deduction benefits of its own, and that the matter can be examined once taxation has taken effect if that proves necessary.

Kim also argued the start should wait until the system for exchanging crypto financial information across borders is fully working. Koo said again that the schedule stands.

On the wider question of whether this ought to be treated as a capital gain at all, the minister was more careful. The United States, Japan and the United Kingdom tax it that way, he said, and Korea does not have a capital gains tax system, so the question has to be reviewed comprehensively for the capital market as a whole rather than for virtual assets alone. That characterisation is his. The paper's English is its own translation from Korean.

What the tax actually does

The National Tax Service publishes the mechanics, and they answer part of the committee exchange directly.

Gains and losses are aggregated across the year, not transaction by transaction. A basic deduction of 2.5 million won a year applies to what is left. The rate on the remainder is 20 percent, and it is assessed separately, reported during the following year's comprehensive income tax filing window of 1 May to 31 May under Article 70(2) of the Income Tax Act.

So losses do net. They net inside a calendar year and they stop at the end of it, which is the distinction the argument in committee turned on.

Two further rules matter for anyone holding a position now. Acquisition cost is worked out by moving average for assets traded through a registered virtual asset service provider and by first in, first out for everything else, under Article 88(1) of the enforcement decree. And for assets already held before 1 January 2027, Article 37(5) of the Income Tax Act sets the acquisition cost at the greater of the actual cost and the market price on 31 December 2026.