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South Korean investors have forced a fourth delay debate over the country's planned 22% tax on cryptocurrency gains, after a petition to push the start date back by two years cleared the 50,000-signature threshold required for automatic National Assembly review.
The tax, originally discussed in 2022 and already postponed three times, is scheduled to take effect on Jan. 1, 2027. It would apply a 22% effective rate (20% national plus 2% local) to annual digital asset gains above a 2.5 million won ($1,856) basic deduction, covering income from selling, transferring, and lending crypto assets.
Why it matters
The petition crossed the threshold of 50,000 verified signatures within 30 days, which automatically refers the matter to the relevant standing committee for official review. A separate petition in early May calling for full abolition hit the same threshold even quicker, in eight days, but did not advance beyond committee referral.
Petitioners argue the infrastructure for taxing crypto is not ready and that the rule would push activity and capital to offshore venues. "Most crypto investors are sitting on heavy losses; major Korean crypto firms are seeing operating profits fall by as much as 90%; and the whole industry is in the red," one translated petition statement read. The petitioner also warned that taxing young retail investors now would "kick away a wealth ladder" at a moment when volatility makes actual revenue collection marginal.
Market impact
The government is signalling no retreat. Lee Hyoung-Il, nominee for Minister of Economy and Finance, said over the weekend that the crypto tax plan is on schedule and that the National Tax Service will publish detailed tax standards later this year, according to Yonhap News Agency. The split between a fourth Assembly-level petition and an on-schedule ministerial stance means Korean retail traders face the same policy uncertainty that has dragged through three prior postponements, with the Jan. 1, 2027 effective date still in force unless legislation moves.
Frequently asked questions
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What is South Korea's planned crypto tax rate and when does it start?
A 22% effective rate (20% national plus 2% local) on annual digital asset gains above a 2.5 million won ($1,856) basic deduction, currently scheduled to take effect on Jan. 1, 2027.
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Why are South Korean investors pushing for another crypto tax delay?
Petitioners cite inadequate tax infrastructure, heavy retail losses, operating profit declines of up to 90% at major Korean crypto firms, and the risk of capital moving to offshore platforms if the tax is imposed now.
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What does the 50,000-signature petition threshold do?
Petitions on the National Assembly's electronic system that collect 50,000 verified signatures within 30 days are automatically referred to the relevant standing committee for official legislative review.
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Has the government signalled any willingness to delay the tax again?
No. Lee Hyoung-Il, nominee for Minister of Economy and Finance, said over the weekend that the plan is on schedule and that the National Tax Service will publish detailed tax standards later this year, according to Yonhap News Agency.
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How many times has South Korea postponed its crypto tax already?
The plan has been pushed back three times since it was first discussed in 2022, and this latest petition marks the fourth push for a further delay, seeking to push the start date back by two years.
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