South Korea’s ruling Democratic Party has formally proposed delaying the country’s tax on crypto income, which is currently scheduled to begin on Jan. 1, 2027. Party leader Kim Min-seok made the proposal at a supreme council meeting at the National Assembly, according to local outlet News1.
If approved, it would be the fourth delay since lawmakers first passed the levy in 2020. The tax would apply a 22% rate, including local tax, on annual gains from transferring or lending crypto assets above a basic deduction of 2.5 million won (about $1,868.7).
Law Before Tax
Kim said party members agreed that the Digital Asset Basic Act should be passed before any crypto tax takes effect. The act is a planned legal framework setting broad rules for crypto in South Korea. Kim said companies and investors need time to adjust once those rules are in place.
The decision followed consultations through the Strategy and Finance Committee, talks with the government, and meetings with crypto asset businesses, Kim said.
Prerequisites and Timeline
Kim acknowledged the tax has been delayed several times before and said the party would set a clear deferral period this time. He listed tasks that must be completed before the tax can start, including using overseas transaction information, verifying the IT systems that would handle the tax, and preparing taxpayer guidance.
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, the presidential office was reportedly discussing pushing the tax back to 2029, which would align with the United States’ planned entry into the OECD’s Crypto-Asset Reporting Framework, a system for sharing crypto transaction information among tax authorities. Kim’s mention of overseas transaction information as a prerequisite connects to this type of data sharing.
The government has not yet announced final approval of the deferral.
