SOUTH KOREAN INVESTORS PUSH FOR FOURTH CRYPTO TAX DELAY
South Korean crypto investors are pushing for another delay to the country’s long-awaited cryptocurrency tax after a National Assembly petition crossed the threshold required for formal legislative review. The development comes just months before the government plans to begin taxing certain digital asset gains on January 1, 2027. The petition passed 50,000 verified signatures, automatically sending it to the National Assembly’s Strategy and Finance Committee. However, the referral does not change the implementation date. The government continues to prepare for the 2027 rollout, with Finance Minister nominee Lee Hyoung-il saying detailed taxation standards will be published by the National Tax Service before the end of the year.
Under the current framework, annual gains from transferring or lending virtual assets above a 2.5 million won deduction will face a 20% income tax plus a 2% local tax, producing an effective rate of 22%. The rules are expected to cover millions of South Korean crypto investors.
KEY TAKEAWAYS
- A petition seeking another two-year delay has passed the 50,000-signature threshold for National Assembly review.
- South Korea’s crypto tax remains scheduled to begin on January 1, 2027.
- Annual gains above the 2.5 million won basic deduction would face a combined 22% tax.
- The planned regime has already been postponed three times.
- Investors and industry groups continue to raise concerns about tax reporting infrastructure and cross-border transactions.
- Finance Minister nominee Lee Hyoung-il supports implementation in 2027 and says detailed standards will be released before year-end.
- Committee review does not itself delay the tax. A legislative amendment would be required to change the start date.
INVESTORS SEEK ANOTHER DELAY AS TAX DEADLINE APPROACHES
The latest petition was submitted through the National Assembly’s electronic petition system and reached 51,004 verified signatures by September 14, according to The Block. Under the parliamentary system, petitions that secure at least 50,000 verified signatures within 30 days are referred to the relevant standing committee for consideration. Supporters of the delay argue that South Korea still needs more time to develop reliable systems for calculating acquisition costs and tracking transactions involving overseas exchanges and private wallets. The petition also claims that domestic crypto businesses have experienced significant declines in operating profits and that imposing the tax under current market conditions could encourage some investors to move activity to offshore platforms. Those claims come from the petition and should not be treated as independent government estimates.
The latest push follows an earlier petition submitted in May that called for the planned crypto tax to be abolished altogether. That petition also passed the 50,000-signature threshold, but it did not result in a legislative change.
GOVERNMENT MAINTAINS THE 2027 TIMELINE
Despite the renewed pressure, government officials continue to support the existing implementation schedule. Lee Hyoung-il, the nominee to lead South Korea’s Ministry of Finance and Economy, said in written responses submitted ahead of his confirmation hearing that the cryptocurrency tax should begin as scheduled. He also said the National Tax Service will publish specific taxation standards through a public notice before the end of 2026.
Lee defended the decision to classify virtual asset income as miscellaneous income, saying the structure provides a basic deduction and a single tax rate. He also argued that taxing digital assets would improve tax fairness when compared with existing taxation of certain stock investments.
The government has also indicated that transactions involving overseas exchanges will not automatically fall outside the tax system. Lee said authorities can obtain relevant information through overseas financial account reporting and international information exchange mechanisms, including the OECD’s Crypto-Asset Reporting Framework.
TAX STRUCTURE REMAINS A POINT OF DEBATE
The planned system treats income from the transfer or lending of virtual assets as other income. After the 2.5 million won annual deduction, the remaining taxable amount would face the combined 22% rate.
A separate concern raised by industry participants is the treatment of losses. Seoul Economic Daily reported that the current framework does not allow investors to carry losses from one tax year into the next. That could create a situation where an investor records a large loss in one year and then pays tax on gains in the following year despite little or no profit across the two-year period. These concerns are adding to pressure on lawmakers as the January 2027 deadline approaches.
Conclusion
South Korea is now facing another debate over whether its long-delayed cryptocurrency tax should finally take effect. The latest petition ensures that lawmakers will formally review another request for a postponement, but it does not suspend the existing legislation.
For now, the government remains committed to the January 1, 2027 start date and is preparing detailed implementation guidance through the National Tax Service. Any fourth postponement would therefore require lawmakers to make another change to the existing tax legislation.
The immediate question is no longer whether investors can formally challenge the timeline. They have already done so. The next stage will be whether parliamentary review produces a legislative amendment before the tax takes effect.
