South Korea Wants Crypto Law First, Proposes Fourth Delay to 22% Crypto Tax
by Maisie Morrison · BlockonomiTLDR
Table of Contents
- South Korea’s ruling Democratic Party has formally proposed delaying the country’s crypto income tax.
- The tax is set to start on Jan. 1, 2027, and would charge 22% on gains above 2.5 million won.
- Party leader Kim Min-seok wants the Digital Asset Basic Act passed before the tax begins.
- If approved, this would be the fourth delay since the tax became law in 2020.
- The presidential office was reportedly discussing pushing the tax to 2029.
South Korea’s ruling Democratic Party has formally proposed delaying the country’s tax on crypto income. The tax is currently scheduled to begin on Jan. 1, 2027.
Party leader Kim Min-seok made the proposal at a supreme council meeting held at the National Assembly. Local news outlet News1 reported his comments on Wednesday.
If the government approves the plan, it would be the fourth time the tax has been pushed back. Lawmakers first passed the levy in 2020.
Law Before Tax
Kim said party members agreed on a clear order of steps. They want the country to pass the Digital Asset Basic Act before any crypto tax takes effect.
The Digital Asset Basic Act is a planned legal framework that would set broad rules for crypto in South Korea. Kim said companies and investors need time to adjust once those new rules are in place.
The decision came after several rounds of talks. Kim said the party consulted through the Strategy and Finance Committee, held talks with the government, and met with crypto asset businesses.
Under the current plan, the tax would apply to yearly gains from transferring or lending crypto assets. The rate would be 22%, which includes local tax.
Investors would only pay tax on gains above a basic deduction. That deduction is set at 2.5 million won, or about $1,868.7.
This means an investor with yearly crypto gains below that amount would owe no tax under the current plan. Gains above that amount would be taxed at the full 22% rate.
A Promise of a Firm Timeline
Kim acknowledged that the tax has been delayed several times before. He said the party would set a clear deferral period this time.
He also listed tasks that need to be finished before the tax can start. These include using overseas transaction information and verifying the IT systems that would handle the tax.
Taxpayer guidance is also on the list of prerequisites. Kim said the party would prepare these items thoroughly during the delay.
The proposal does not change the law on its own. The current start date of Jan. 1, 2027, remains in place unless the delay is approved.
Last week, South Korea’s presidential office was reportedly discussing pushing the tax back to 2029. That would be two years later than the current start date.
The reported 2029 timeline is tied to the United States. It would line up with when the U.S. plans to join the OECD’s Crypto-Asset Reporting Framework.
The framework is designed to let tax authorities in different countries share information about crypto transactions. Kim’s mention of overseas transaction information as a prerequisite connects to this type of data sharing.
With the ruling party’s formal proposal now on record, the decision on a fourth delay moves forward. The government has not yet announced final approval of the deferral.