South Korean tax panel warns against crypto loss carryforwards

A South Korean National Assembly tax subcommittee has expressed concerns that allowing tax loss carryforwards for digital asset investments may encourage speculative trading. The committee's review materials for the 2026 regular session indicate that permitting these carryforwards could enhance the speculative nature of the digital asset market. It noted that previous approvals for carryforward deductions under the former financial investment income tax aimed to incentivize investment in risky assets and promote venture capital. However, the committee argues that the digital asset market does not require similar policy support as the domestic stock market. It also stated that claims for allowing carryforwards based on fairness with the tax system lack sufficient justification, especially since the financial investment income tax has been abolished. Additionally, the committee raised concerns regarding tax fairness compared to other investment assets.

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