South Korea's National Assembly Finance and Economy Committee raised concerns today (November 11) about a proposed loss carryforward deduction system for digital asset investments, warning it could amplify speculative behavior. According to the committee's 2026 tax subcommittee review materials, the measure could also create tax equity issues with other asset investors and increase revenue volatility. The committee noted that, unlike the domestic stock market, the digital asset market does not face recognized policy stimulus needs. Pending bills in the legislature propose allowing losses to be carried forward for either 3 or 5 years, though the committee acknowledged that loss carryforward aligns with the principle of ability-to-pay taxation by ensuring taxation on net income.

The committee also flagged potential tax revenue fluctuations due to high price volatility in the digital asset market, noting that large losses incurred during downturns could offset gains during upswings, significantly reducing annual tax revenue.

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