South Korea Ruling Party Proposes Fourth Crypto Tax Delay
Democratic Party leader Kim Min-seok proposed a fourth postponement of South Korea's 22% crypto income tax, citing the need to first enact the Digital Asset Basic Act. A two-year delay is reportedly under discussion, but the legal start date remains Jan. 1, 2027.
South Korea's crypto income tax, legislated in 2020 and postponed three times since, may be headed for a fourth delay: the ruling Democratic Party has formally proposed that the government push back the levy, which is currently set to take effect on Jan. 1, 2027.
Party leader Kim Min-seok made the proposal at a party supreme council meeting at the National Assembly, according to a News1 report published Wednesday. He said the decision followed consultations through the Strategy and Finance Committee, government-party talks, and meetings with crypto asset businesses.
What the tax would do
The planned levy is 22%, including local tax, on annual gains from the transfer or lending of crypto assets above a basic deduction of 2.5 million won, roughly $1,868.7. Without legislative action, that regime starts on the first day of 2027.
The party's reasoning
Kim said party members agreed that South Korea should first enact the Digital Asset Basic Act, a comprehensive legal framework for crypto, and give companies and investors time to adapt to the new rules. In other words, the party wants the rulebook written before the tax bill arrives, so that the people being taxed know the framework they operate in.
Kim also acknowledged that the tax has been deferred before. This time, he said, the party would set a clear deferral period while preparing several prerequisites: use of overseas transaction information, IT system verification and taxpayer guidance.
How long, and what is still open
The length of the delay is not settled. A two-year postponement is reportedly under discussion, and last week South Korea's presidential office was reported to be weighing a delay until 2029, which would align the country with the U.S. timeline for joining the OECD's Crypto-Asset Reporting Framework.
Those two figures sit comfortably together, since two years from the current start date lands in 2029, but neither has been confirmed as a final position. No deferral period has been set in the reports so far.
Why it matters
This is a proposal, not law. The legal start date stays Jan. 1, 2027 until a delay is actually enacted, so investors and exchanges still face the current schedule on paper.
The prerequisites Kim listed, particularly access to overseas transaction data, point to a practical problem: a tax on gains is difficult to administer when much of a taxpayer's activity may sit on foreign platforms. The reported link to the OECD reporting framework suggests that cross-border data access, as much as the Digital Asset Basic Act, may shape how long the delay lasts. Kim's promise of a clear deferral period is, in effect, an answer to the obvious objection that a fourth postponement invites a fifth.
