South Korea

Korea Herald | English | News | Dec. 12, 2025 | UndeterminedTaxes

Korea’s decade-old VAT refund incentive for foreign patients undergoing cosmetic and plastic surgery procedures will end on December 31, 2025. This program, introduced in 2016, allowed foreign medical tourists to reclaim a 10 percent VAT on various aesthetic treatments and has been a significant factor in attracting price-sensitive international patients to Korea. The National Assembly recently excluded the tax refund provision in the latest revision of the Act on Restriction on Special Cases Concerning Taxation, prompting concerns within the medical tourism sector about rising costs and reduced pricing transparency.

The aesthetic medical tourism industry is a major economic contributor, with foreign patient spending rising from about 400 billion won in 2019 to 1.24 trillion won ($840 million) in 2024, with plastic surgery and dermatology accounting for over 77 percent. VAT refunds issued to foreign patients reached a record 95.5 billion won in 2024. However, analysts suggest that the immediate effect of the tax refund removal may be limited due to Korea’s strong international demand, a weak won, and favorable visa policies, alongside high service quality and trust.

Despite short-term resilience, there are growing concerns that Korea’s competitive edge may decline as other countries like Singapore, Thailand, and China enhance their medical tourism offerings. Price sensitivity among Chinese patients, who make up a large share of Korea’s outbound medical tourists, could shift demand to rival destinations. Additionally, experts worry that ending the VAT refund system could reduce pricing transparency and revive issues with illegal brokers and inflated billing, as the refund program had helped mitigate these problems by encouraging price verification.

Medical tourism operators plan to continue lobbying the government for reinstatement of the VAT refund, citing successful industry efforts to restore other tourist-related tax incentives in the past. They emphasize the potential negative impacts of the program's abolition and hope for reconsideration to maintain Korea’s attractiveness as a medical tourism hub.

제동 걸린 가상자산 2단계 입법…업계가 바라보는 쟁점은

ZD Net Korea | Local Language | News | Dec. 12, 2025 | Regulation

Phase 2 legislation intended to establish a comprehensive institutional framework for the virtual asset market in Korea has been delayed due to the government's failure to submit key bills by the scheduled deadline. The Financial Services Commission (FSC) had planned to present drafts of a basic digital asset law and Korean-won stablecoin regulations to the National Assembly by December 10, but missed this cutoff, disrupting the anticipated legislative review for the year. These bills are critical as they address issuance, distribution, authorization, and disclosure standards, areas not covered in the initial phase, leading to significant industry disappointment.

The delay is attributed mainly to ongoing disagreements between the FSC and the Bank of Korea regarding the issuance structure for Korean-won stablecoins. The Bank of Korea advocates for a consortium model dominated by commercial banks, citing concerns about financial stability and the payments system, suggesting a bank-centered issuer design to mitigate risks to monetary policy and reserve assets. Conversely, the FSC opposes restrictive shareholding rules, fearing they would limit participation from non-bank entities like fintech and payment firms, thereby reducing industrial diversity. The FSC favors global trends that maintain open issuer participation while controlling risks through capital and liquidity requirements.

These institutional conflicts extend to supervisory authority allocation. The FSC insists on centralized authorization and supervision of stablecoins under its control, aligning with financial regulatory principles. Meanwhile, the Bank of Korea seeks effective involvement from the authorization phase based on payments and settlement stability concerns. Proposals to grant the Bank rights such as participation in inspections or emergency measures were opposed by the FSC, which argues that such involvement would complicate supervision and burden market players.

The regulatory uncertainty is creating anxiety within the virtual asset sector, as stablecoin institutionalization is seen as key to expanding practical applications like payments, remittances, and on-chain financial services. Legal ambiguity around issuance qualifications and supervision is hindering project development, with some banks and fintech companies considering consortium models but unable to proceed fully due to the lack of clear standards. Prolonged delays may push the market toward adopting foreign regulatory frameworks or foreign-currency-backed stablecoins.

The resolution of this dispute is viewed as pivotal for the future direction of Korea’s digital asset industry. The finalized approach to stablecoin issuance and supervision will determine whether the market becomes bank-centric or remains open to diverse private-sector participants. Industry stakeholders warn that overly narrow issuer scopes risk entrenching banks as dominant players, while overly broad regulation raises concerns about reserve asset management and de-pegging risks. The distribution of supervisory authority and safeguards will shape both the sector’s growth speed and its credibility.

Korea Herald | English | News | Dec. 12, 2025 | North Korea

North Korea convened the 13th Enlarged Plenary Meeting of the Eighth Central Committee of the ruling Workers’ Party of Korea on December 9, presided over by leader Kim Jong-un. The session brought together senior party officials, government ministries, provincial leaders, and military commanders to review state policy implementation and prepare for the Ninth Party Congress expected in early 2025. The upcoming congress, held every five years, is anticipated to set the roadmap for economic management, military development, and foreign policy toward Seoul and Washington. The plenary session, originally expected mid-December, was moved up to accelerate these preparations.

Following the start of the plenum, North Korea fired around 10 artillery rockets into the Yellow Sea, likely from a 240 mm multiple rocket launcher system, as part of its annual winter training drills. The rockets have the capability to reach Seoul and surrounding areas. This launch occurred shortly after South Korea reported incursions by Chinese and Russian military aircraft into its air defense identification zone, suggesting a possible signal of solidarity with Beijing and Moscow amid growing trilateral military cooperation.

The plenum resulted in the approval of discussions on five agenda items, including finalizing preparations for the upcoming congress and reviewing the five-year economic plan adopted in 2021. Analysts expect limited public disclosures from this meeting, reserving major policy announcements for the formal party congress. Key points under observation include the potential institutionalization of "Kim Jong-un’s revolutionary thought" as an official guiding ideology, the possible revival of the abolished state presidency system to strengthen Kim's authority, and the formal adoption of the "two-state theory" in the party charter, signaling a shift to treating South Korea as a hostile foreign state rather than a divided nation.

Additional interests include signs of internal reforms, such as anti-corruption measures, tighter party discipline, or reorganization of economic and administrative bodies, as Kim prepares his governance priorities for the next five years. The regime appears to be maintaining a calm, domestically focused stance ahead of the congress, emphasizing internal party management over external messaging.