On October 14, the Korea Blockchain Association(KBA) suggested that the taxation of digital assets to be delayed until January 1, 2023 in relation to the ‘Income Tax Act Partial Amendment'(Proposition 3324). Kapsoo Oh, chairman of KBA, argued that “a reasonable period is necessary to prepare for taxation cooperation among Virtual Asset Service Providers(VASP) and for this reason it is necessary to delay the effective date.
According to the amendment made on tax law in July, domestic residents are to levied other income tax on income generated by the transfer or rental of digital assets. It is stipulated to be taxed at the amount calculated by multiplying the amount of other income minus 2.5million KRW by 20%. For non-residents, classify income generated by the transfer, rental, or withdrawal of digital assets as domestic sources and other income. In the case of transfer, rental, or withdrawal through a VASPs, the principle is to impose withholding obligations on the entity of VASPs.
The association said, “we believe that the taxation of digital asset income is in line with the tax principles and we will actively cooperate with it. However, in order to cooperate with the current tax law amendment, the establishment of the taxation infrastructure of individual exchanges much be preceded before the implementation date, which may be insufficient time left to prepare.”
Chaiman Oh, said “It is necessary to provide a reasonable amount of time to properly prepare so that the industry can faithfully implement taxation and contribute to the national economy.”
Translated by Young Hwang