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S Korea opposition proposes 3-year crypto tax delay to 2030

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S Korea opposition proposes 3-year crypto tax delay to 2030

2026-08-10 08:33 UTCBy AlphaScala Research DeskSource reporting: Crypto newsEditorial standards

S Korea opposition proposes 3-year crypto tax delay to 2030

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The People Power Party amendment would push the 22% levy from 2027 to 2030, while a separate bill seeks to scrap it entirely. The government backs the 2027 start date.

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South Korea's opposition People Power Party moved to delay the country's 22% cryptocurrency investment tax by three years to Jan. 1, 2030, days after the government confirmed the 2027 deadline.

Lawmaker Jeong Seong-guk plans to introduce an amendment to the Income Tax Act that would move the implementation date from Jan. 1, 2027, to Jan. 1, 2030, according to local broadcaster MBN. Jeong said the additional three years would give lawmakers and authorities time to review the virtual asset tax system and related rules before investors become liable for the tax. He argued that setting a later date would provide more certainty for taxpayers and reduce confusion while the framework is being reconsidered.

South Korea has already delayed the levy three times. Lawmakers originally approved the cryptocurrency income tax provisions in 2020 with a 2022 start date. The deadline shifted to 2023, then 2025, and finally 2027 as authorities worked on reporting requirements and administrative systems.

Under the current rules, annual gains above 2.5 million won face a combined rate of 22%, consisting of a 20% national income tax and a 2% local income tax. The Ministry of Economy and Finance illustrated the calculation in its 2026 tax proposal using an investor who earns 5 million won from Bitcoin trading in a year. After deducting the 2.5 million won allowance, the remaining 2.5 million won would generate a tax bill of 550,000 won.

Finance Minister Koo Yun-cheol told a parliamentary committee on July 29 that the government planned to introduce the tax according to the existing schedule and consider improvements after gaining experience with its operation. The ministry confirmed on Aug. 3 that its 2026 tax reform proposal did not include another postponement for virtual asset taxation. The package still requires National Assembly approval, where lawmakers can amend the tax provisions or change their implementation date.

Another People Power Party lawmaker, Song Eon-seok, introduced a bill in March that would remove the cryptocurrency income tax provision from the Income Tax Act entirely. The proposal has been tabled before the National Assembly's Finance and Economic Planning Committee and could proceed to a subcommittee for further consideration.

Opposition lawmakers have argued that the tax creates unequal treatment between cryptocurrency and stock investors. South Korea abolished its planned financial investment income tax for ordinary investors, leaving most retail stock gains outside the comparable tax regime. During the July 29 committee hearing, People Power Party lawmaker Kim Sang-hoon questioned the absence of provisions allowing investors to carry trading losses forward. He warned the structure could encourage investors to move trading from domestic platforms such as Upbit, Bithumb, Coinone and Korbit to overseas centralized exchanges, decentralized finance services or peer-to-peer markets.

Responding to the committee, Koo said treating virtual asset gains under South Korea's capital gains tax framework would require a review of the country's financial taxation system. The finance minister said changes could be considered after authorities gained experience operating the cryptocurrency tax.

The dispute over taxation comes as regulators work on a consolidated Digital Asset Basic Act. The Financial Services Commission told the National Assembly in late July that it was preparing the legislation with the ruling Democratic Party. The framework is expected to address stablecoin issuance, exchange requirements, disclosures, internal controls and trading-system resilience. Several provisions remain under discussion, including whether issuers of won-backed stablecoins should be controlled by bank-led consortiums and whether ownership restrictions should apply to major cryptocurrency exchanges.

Jeong has separately introduced legislation involving institutional access to cryptocurrencies. MBN reported that he became the first lawmaker in the 22nd National Assembly to propose a bill allowing institutional cryptocurrency investment through spot exchange-traded funds that could include assets such as Bitcoin and Ethereum.

Jeong's amendment would change only the implementation timetable, leaving the tax provisions in place. Song's bill would remove the relevant provision from the Income Tax Act altogether. MBN reported that the government and ruling Democratic Party are expected to argue for maintaining the 2027 start date when the repeal bill reaches detailed committee discussions.