Choi Eun-seok Bill Defers Korea's Digital Asset Tax to 2029

Deduction Raised to 50 Million Won

A partial amendment to South Korea's Income Tax Act filed on October 27 would push the start of digital asset taxation back by two years, moving the effective date from January 1, 2027 to January 1, 2029. Choi Eun-seok of the People Power Party introduced the bill in the National Assembly as lead sponsor. Under the law now in force, income from transferring or renting virtual assets is classified as other income: an annual basic deduction of 2.5 million won is applied first, and the remainder is taxed at a flat 20%. A basic deduction, in this structure, is the fixed amount subtracted from taxable income before any rate applies. The amendment would raise both the basic deduction and the minimum taxable threshold to 50 million won, so no income tax would be levied at all when a taxpayer's annual digital asset income stays at or below that level. The deferral covers income from transfers and rentals alike, and it would leave the 20% rate itself untouched.

The bill's second pillar is loss relief, which current law does not provide. If necessary expenses exceed total income from digital asset trading in a given year, the resulting deficit could be deducted from digital asset income across the five tax periods that follow, a mechanism known as loss carryforward. One condition attaches: the loss must be substantiated by objective records, including transaction histories submitted by virtual asset business operators. The amendment text states that the timing of taxation on digital asset income should be delayed so the system can be supplemented before enforcement. It also cites the absence of adequate tax infrastructure for verifying the acquisition cost of assets traded on foreign exchanges and held in personal wallets.

Stock Parity and the Volatility Argument

Choi's stated grounds center on fairness between asset classes. The financial investment income tax has been abolished, which means capital gains on domestic listed shares traded on exchange by ordinary individual investors are in principle not taxed at all. Against that baseline, he argues, applying only a 2.5 million won annual deduction to digital assets would create an equity problem between investment assets, a class he frames broadly enough to run from listed stocks to gold. Volatility is his second ground: digital assets swing widely in price, yet the current rules permit no carryforward of losses from one year to the next. He presented the two arguments together as the amendment's necessity.

The amendment would also speak to the verification problem. Acquisition costs for assets bought on offshore venues are difficult for tax authorities to reconstruct, whether coins were bought on the largest global platforms or on smaller venues outside the usual best crypto exchanges shortlists, and the filing treats that gap as part of the case for delay. Because the bill sits at the proposal stage, its three headline parameters, the two-year deferral, the 50 million won deduction and the five-year carryforward, are all unconfirmed. The current deduction of 2.5 million won and the absence of loss relief remain in force. The National Assembly's review schedule is not set, and the government's position on the bill is not yet known.

The filing lands while the broader policy debate is unsettled. The Democratic Party has discussed a deferral at party-government council level without concluding, and a decision was expected within one to two weeks. The bill matters less as a text that will pass in its current shape than as the first to attach specific numbers, 2029, 50 million won, five years, to a discussion that had stayed abstract. For taxpayers, the operative figures today are unchanged: 2.5 million won deducted each year, 20% on the excess and no loss relief, unless the Assembly writes this amendment into the Income Tax Act.