Lee Hyung-il Defers Investment Tax Review; Crypto Tax Starts in January

The “policy vacuum” matters more than when the financial investment income tax starts

When Lee Hyung-il, nominee for deputy prime minister and minister of economy and finance, said on the 13th that the financial investment income tax would be reviewed after market stabilization, stock investors were prompted to focus first on the fact that the conditions for policy judgment remain open, rather than on whether the tax will be introduced. According to Maeil Business Newspaper’s economics desk, cryptocurrency taxation is scheduled to begin next January, with detailed rules to be published in a National Tax Service notice by year-end. Because the taxation systems for stocks and cryptocurrencies are moving on different timelines and through different procedures, transaction-record management by related businesses and filing preparation by retail investors remain key variables.

Lee Hyung-il’s remarks signal policy ahead of the 15th confirmation hearing

Ahead of his confirmation hearing scheduled for the 15th, Lee said he would overhaul the system to respond to changes in financial markets and industry and build a fair and efficient financial taxation framework. He said introducing a financial investment income tax and other capital-gains taxes is “a matter to be considered after market conditions have stabilized sufficiently.” This was not an announcement setting a launch date, but a response that presented market stability as a prerequisite.

He described inheritance and gift-tax reform as an issue where views coexist on easing the tax burden and ensuring tax fairness, saying it should be discussed in depth on the basis of gathering diverse opinions and reaching social consensus. For corporate tax, he proposed continuing growth-friendly tax support while overhauling tax exemptions and reductions with low effectiveness. The materials did not specify a final reform plan or which measures would be revised.

For crypto taxation, filing rules matter more than the start date

Cryptocurrency taxation is scheduled to begin next January. Lee said specific tax rules would be published in a National Tax Service notice by year-end to reduce taxpayers’ filing difficulties. No facts have yet been disclosed on the tax rate, basic deduction amount, or calculation method by transaction.

Lee explained that classifying cryptocurrency income as other income is appropriate because it enables comprehensive income taxation, reduces tax-compliance costs, and applies taxpayer-friendly features such as a basic deduction and single tax rate. He believes taxing cryptocurrency as well would help improve fairness. The actual burden cannot be calculated until the detailed wording of the National Tax Service notice is released.

How the policy reaches Kiwoom Securities and Coinbase Global

• Kiwoom Securities: Kiwoom Securities is a brokerage that provides stock-brokerage services. Once the timing and method of introducing the financial investment income tax are determined, retail investors’ perception of trading costs and filing procedures could change, affecting the brokerage environment. Since the launch timing is not yet fixed, there is no basis to assert a direction for earnings.
• Coinbase Global: Coinbase Global operates a platform for cryptocurrency trading, transfers, and custody. The tax taking effect next January and the National Tax Service notice due by year-end are directly linked to managing users’ transaction histories and filing-support procedures. Clear rules would improve policy predictability, but the materials provide no indication of the direction of changes in transaction costs or usage.
• National Tax Service: The National Tax Service plans to publish cryptocurrency tax rules by year-end. The first document investors should check is not a legal explanation but the notice’s calculation and filing standards.

Conditions separating bullish and bearish outcomes

If market stability continues in discussions over the financial investment income tax, the possibility that introduction will be pushed back could be interpreted as reducing retail investors’ short-term policy uncertainty. Brokerage businesses such as Kiwoom Securities would not need to immediately incorporate additional policy variables into the trading environment. This assessment remains valid only until the criteria for market stability and subsequent policy announcements are confirmed.

Conversely, if market volatility increases or the stability conditions are not met, discussions on introducing the financial investment income tax could be delayed again. Even if cryptocurrency tax rules are published by year-end, complex provisions could increase filing burdens, and users without adequate transaction-history systems may feel the costs. In either case, the direction of stock prices or trading volume cannot be determined before the tax rate and basic deduction are disclosed.

Investor action points

• Check separately the remarks made on the 13th and the answers at the 15th confirmation hearing. The first checkpoint is whether the hearing clarifies the criteria for judging market stability.
• Review the year-end National Tax Service notice for how taxable income is calculated and how filings are made. The tax rate and basic deduction amount remain unconfirmed until the notice is issued.
• Kiwoom Securities investors should watch the next announcement for whether the introduction date of the financial investment income tax is actually set and whether guidance on brokerage services changes.
• Coinbase Global users should check how transaction-record retention and filing support will be presented before implementation next January.

Frequently asked questions

When will the financial investment income tax be introduced?

Candidate Lee Hyung-il said the financial investment income tax is a matter to be considered after market conditions have stabilized sufficiently. No specific introduction date has been confirmed.

When will cryptocurrency taxation begin?

Cryptocurrency taxation is scheduled to begin next January. Detailed tax rules are scheduled to be published in a National Tax Service notice by year-end.

How is cryptocurrency income classified?

Candidate Lee Hyung-il said it is appropriate to classify cryptocurrency income as other income. The tax rate and basic deduction amount that determine the actual tax burden have not yet been confirmed.

This article is automatically summarized and analyzed based on the original news report. View original (Maeil Business Newspaper Economics)