South Korea's multi-party and union initiatives to tax "unrealized gains" on stocks and real estate

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ME News Report, June 23 (UTC+8), South Korea's ruling party lawmakers and multiple labor and social groups proposed including unrealized gains (paper profits) from assets such as stocks and real estate into the scope of comprehensive income tax, advocating for taxation based on actual economic ability rather than the point of sale to close capital income tax loopholes.
Scholars attending the meeting pointed out that taxing only at the time of asset sale would lead taxpayers to delay transactions, creating a "freezing effect" that hampers capital flow to more efficient sectors.
The plan includes: generally recognizing unrealized gains as income, but deferring the tax obligation until the asset is sold with interest; taxing real estate and non-listed equity that are difficult to assess at market value upon realization; or limiting the new system to high-net-worth individuals and specific financial assets, and strengthening the tax burden on high-income capital income earners.
According to Lee Chan-jin, head of the Korea Financial Supervisory Service, recent speculative overheating in single-stock leveraged ETFs by Samsung Electronics and SK Hynix has already caused policy side effects.
He admitted that the launch of such products should have been more strongly prevented initially, and warned that high-leverage trading and margin buying ("buying stocks with borrowed money") could amplify market volatility and impact retail investors.
(Source: PANews)
SAMSUNG-12.52%
SKHYNIX-12.82%
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