South Korea’s ruling party leader has proposed delaying the 22% tax on crypto gains, scheduled to take effect on Jan. 1, 2027, once again, calling for the sector’s legal framework to be completed first.
According to a statement reported by News1 on Nov. 4 and covered by The Block, Democratic Party leader Kim Min-seok called on the government to delay the tax at a meeting of the party’s Supreme Council at the National Assembly. If the proposal is approved, implementation of the tax, enacted in 2020, will have been delayed for the fourth time.
Kim said the proposal took shape after discussions in the Strategy and Finance Committee, government-party consultations, and meetings with crypto businesses. The party’s position is that comprehensive rules should be established before companies and investors transition to the new tax.
Which gains will be taxed?
Under the current schedule, a 22% tax, including local tax, will apply to annual gains from the transfer or lending of crypto assets that exceed 2.5 million won. The report puts this exemption threshold at approximately $1,869.
The ruling party wants the Digital Asset Basic Act to be enacted first and companies and investors to be given time to adapt to the new system. The tax is currently scheduled to take effect on Jan. 1, 2027.
This time, the party is calling for a clear postponement period
Referring to previous delays, Kim said a clear timeline should be set this time. Preparations include using information on overseas transactions, verifying information technology systems, and informing taxpayers.
Last week, the Presidential Office was reported to be considering the option of delaying the tax until 2029. That timeline had been raised on the grounds that it would align with the United States’ process of joining the OECD Crypto-Asset Reporting Framework; Kim did not specify a new start year in his latest call.
Not investment advice.