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South Korea's ruling Democratic Party leader Kim Min-seok formally proposed delaying the country's crypto income tax, which is currently scheduled to take effect on Jan. 1, 2027. Kim said the party wants the Digital Asset Basic Act enacted first and businesses and investors given time to adapt to the rules.
Why it matters
The proposal follows consultations with government officials and crypto businesses. If approved, it would be the fourth postponement of the levy, first legislated in 2020. Kim said the party would set a clear deferral period and prepare prerequisites, including access to overseas transaction information, IT system verification and taxpayer guidance.
Market impact
The tax plan would impose a 22% levy, including local tax, on annual gains from transferring or lending crypto above a 2.5 million won ($1,868.7) basic deduction. The proposal does not itself change the scheduled start date; further delay would require approval.
South Korea's presidential office was reportedly discussing postponing the levy until 2029, aligning the timeline with the country's planned participation in the OECD's Crypto-Asset Reporting Framework. The ruling party's proposal adds to that debate, while leaving the duration and final outcome unsettled.
Frequently asked questions
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When is South Korea's crypto income tax currently scheduled to begin?
The tax is currently scheduled to take effect on Jan. 1, 2027. The ruling party's proposal would delay it, but does not change the schedule by itself.
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What crypto gains would be covered by the planned tax?
The planned 22% tax, including local tax, would apply to annual gains from transferring or lending crypto above a 2.5 million won ($1,868.7) basic deduction.
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Why does the ruling party want to delay the crypto tax?
The party says it wants the Digital Asset Basic Act enacted first and businesses and investors to have time to adapt to the rules.
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What preparations did Kim Min-seok say are needed before the tax takes effect?
Kim cited access to overseas transaction information, IT system verification and taxpayer guidance as prerequisites.
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How many times would this proposal postpone the levy?
If approved, it would be the fourth postponement of the levy, which was first legislated in 2020.
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