Hwang Seok-jin, a professor at Dongguk University's Graduate School of Information Security, said on the 18th that moving ahead with taxation before a digital asset framework act has even been enacted is backwards.
Hwang said the National Tax Service has largely completed the technical groundwork needed to trace cryptocurrency transactions, but added that tracing transaction records and accurately calculating the income subject to tax are two different things. Even if authorities can confirm the movement of assets through overseas exchanges and private wallets, he said, there are still limits to calculating an individual investor's acquisition cost and gains or losses and determining what is taxable.
He pointed to the current tax framework's focus on the transfer and lending of cryptocurrency as a problem. Trading methods are diversifying through staking and decentralized finance, or DeFi, he said, but detailed tax rules covering them have not been sufficiently established.
He also identified stablecoin payments as an area where tax rules need to be overhauled. "If someone exchanges bitcoin for a dollar-pegged stablecoin and then uses it to buy goods, the issue is how to separate and tax the income arising at each stage of the transaction," Hwang said.