Debate on whether to start or postpone the taxation of virtual assets from next year as scheduled will begin in earnest at the National Assembly on the 15th. Not only the timing of taxation of virtual assets, but also voices calling for raising the standard have made the calculation complicated.
According to the government authorities and the National Assembly on the 14th, the tax subcommittee of the Planning and Finance Committee of the National Assembly, which begins on the 15th, will discuss ways to ease the tax burden on virtual assets.
The current Income Tax Act stipulates that income generated in the process of transfer and rental of virtual assets is regarded as ‘other income’ and a 20% income tax rate is applied to the portion exceeding 2.5 million won. The tax period is from 2022.
Politicians are in a position to delay the taxation of virtual assets by one year. On the other hand, the government argues that taxation should begin next year, as stipulated in the current income tax law.
Democratic Party presidential candidate Lee Jae-myung recently announced on his Facebook page that he would defer the taxation of virtual assets by one year from next year to 2023 and significantly increase the deduction limit.
Opposition parties are also in agreement with the postponement of the taxation period. At a general meeting of the National Assembly on the 8th, Rep. Choo Kyung-ho of the People’s Power said, “The basic policy is that the People’s Power should defer the taxation of virtual assets for at least one year.”
As for the tax law, if the opposition and opposition parties agree to pass the amendment bill, there is no way for the government to stop it. For this reason, the possibility that the taxation of virtual assets will be postponed by one year is weighing on the situation.
However, there are voices in the ruling party calling for an increase in the deduction limit instead of taxation from next year, as the government insists. This reflects the argument of candidate Lee Jae-myung, and he is in a position to raise the deduction limit to 50 million won, the limit of domestic listed stocks.
The government is strongly opposed to raising the deduction limit to 50 million won, the level of financial investment income. They argue that there is no reason to give virtual assets the benefits that are only given to domestic listed stocks because of the supply of industrial funds.
Meanwhile, the tax subcommittee is expected to discuss the transfer tax reform bill. Although both the ruling and opposition parties generally agree on raising the standard for high-priced housing that is exempt from transfer tax, there are differences of opinion in each argument, so the level of reorganization is expected to change depending on the circumstances of the discussion.
Democratic Party lawmaker Dong-su Dong has proposed a bill to raise the standard for high-priced housing, which is exempt from capital gains tax, from the current market price of 900 million won to 1.2 billion won.
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