With digital asset taxation due to take effect in January, the ruling party said it will reach a final conclusion within the year.

Democratic Party leader Kim Min-seok (김민석) appeared on the party's YouTube program "Minty 07" on Wednesday and said he raised the issue, saying it seemed time to conduct a focused final review as calls have grown and opinions have diversified over the issue.

Kim said he also proposed to Deputy Prime Minister and Finance Minister Lee Hyung-il (이형일), who visited the National Assembly the previous day, that they should conduct a final review and reach a conclusion. He added that it may be time to begin focused discussions on whether to proceed with digital asset taxation as it is or how to supplement the system.

Under the current system, digital asset taxation is set to take effect on Jan. 1, 2027. It was introduced through a 2020 revision to the Income Tax Act, but its implementation has been postponed three times so far.

If implemented as scheduled, a 22 percent tax rate, combining other income tax and local income tax, will be applied to the amount remaining after a basic deduction of 2.5 million won from annual income generated through transfers and lending of digital assets.

The government has also begun collecting industry views ahead of implementation. The Finance Ministry held a meeting on Monday attended by the Financial Services Commission, exchanges including Upbit, Bithumb, Coinone, Digital Exchange and Gopax, the Digital Asset eXchange Alliance (DAXA), and experts.

The industry has raised concerns that detailed taxation standards are insufficient for various transaction types such as staking, airdrops, hard forks and decentralised finance (DeFi). It also points to the build-out of a system for submitting taxation data, fairness with users of overseas exchanges, and loss carryforward deductions as tasks to be addressed.

The government has not yet decided whether to proceed with implementation or to postpone it further. At the meeting, Finance Ministry First Vice Minister Kwon Dae-young (권대영) said it is necessary to consider market changes and transaction characteristics along with taxation principles, and said the ministry will review preparation for taxation infrastructure and market discipline systems in a comprehensive manner.

The National Tax Service is currently preparing on the assumption that the tax will take effect in January next year. It is also preparing to be able to issue detailed standards needed for taxation in November.

At the National Assembly, a bill to further delay the tax has also been introduced. Democratic Party lawmaker Park Min-gyu (박민규) proposed an amendment to the Income Tax Act that would effectively push back the start of taxation on digital asset income to 2029. Within the party, there have also been calls that the Framework Act on Digital Assets and taxation infrastructure should be put in place first.

With less than three months remaining until the tax takes effect, the government and the ruling party have decided to conduct a final review within the year, and future discussions are expected to focus on whether to proceed as scheduled, postpone it further, or supplement taxation standards and the handling of deductions and losses.