South Korea's ruling Democratic Party must decide this year whether to proceed with a long-delayed tax on cryptocurrency gains due to take effect on January 1, 2027. Party leader Kim Min-seok
South Korea's ruling Democratic Party must decide this year whether to proceed with a long-delayed tax on cryptocurrency gains due to take effect on January 1, 2027. Party leader Kim Min-seok (@ms2030) said on Thursday that the plan still stands for now, but that it will be weighed against market conditions, the views of young investors and whether the tax system is ready.
The levy was passed into law in 2020 but has never been collected. The government announced the tax in July 2020, and the National Assembly passed the necessary legislation that December for implementation in 2022. The start date was subsequently postponed to 2023, 2025 and 2027.
Investors receive a ₩2.5 million annual exemption, with taxable income above that threshold subject to a 20% national rate, or 22% including local income tax. That threshold is equal to about $1,900. An investor earning a 5 million won annual profit from Bitcoin trading would first deduct the 2.5 million won exemption before paying 22% tax on the remaining amount, resulting in a tax bill of 550,000 won.$BTC is used here as an illustration of how the calculation works.
The first tax filings would be due in May 2028. The tax covers gains from transferring or lending virtual assets.
The opposition People Power Party backs a delay, while Democratic lawmaker Yoon Hu-duk has argued against another one. Support for postponement also exists within the ruling bloc. Democratic lawmaker Park Min-kyu proposed a bill to begin taxation two years after the first year of international exchanges of crypto transaction data, which would effectively move implementation to 2029.
Public pressure has also grown. In May, a petition demanding cancellation of the proposed tax collected 50,000 signatures, meeting the threshold for legislative review. Another petition requesting a two-year postponement reached the same threshold in September.The government also planned to convene representatives from the five major virtual asset exchanges on October 20 to gather industry feedback on the planned taxation.
Political considerations are in play as well. Falling stock prices and tighter property taxation have already frustrated investors, and low approval ratings for President Lee Jae Myung and the ruling party are adding to the political pressure, according to The Korea Times.
A final decision is expected during November's tax law talks. Until then, the January 1, 2027 start date remains the current legal timetable.
The Korea Times: Korea's crypto tax faces 4th delay as gov't turns cautious
Digital Today: Kim Min-seok says ruling party to reach conclusion this year on digital asset tax
crypto.news: South Korea confirms Jan. 2027 launch for long delayed crypto tax
