South Korea’s long-delayed cryptocurrency tax could face another three-year postponement after an opposition lawmaker introduced legislation that would move its implementation from January 1, 2027, to January 1, 2030.
The proposal comes from People Power Party Representative Jeong Seong-guk, who wants to amend the Income Tax Act without eliminating the crypto tax itself. Instead, his legislation would simply change its effective date.
Jeong argues that lawmakers and tax authorities need additional time to review the virtual asset taxation framework, strengthen investor protections and develop infrastructure capable of taxing cryptocurrency fairly.
The proposal could affect a substantial portion of South Korea’s investing population. Approximately 13 million people participate in the country's crypto market, making the taxation framework an important issue for both investors and policymakers.
Government Still Targets 2027
The proposal directly conflicts with the government's current position. South Korea’s Ministry of Economy and Finance recently finalized its 2026 tax reform package without including another crypto tax postponement.
Finance Minister and Deputy Prime Minister Koo Yun-cheol reinforced that position during a National Assembly Finance and Economic Planning Committee meeting on July 29.
Under the existing timetable, cryptocurrency gains earned beginning in 2027 would become taxable, with investors reporting that income starting in May 2028.
South Korea originally approved its crypto taxation framework in 2020, with implementation initially planned for 2022. The start date was subsequently delayed to 2023, then 2025 and eventually 2027.
How South Korea’s 22% Crypto Tax Works
Under the planned framework, income generated from selling or lending cryptocurrencies such as Bitcoin and Ethereum would be classified as “other income.”
Investors would face a combined 22% tax rate, consisting of a 20% national income tax and an additional 2% local tax.
However, taxation would only apply to annual crypto profits exceeding 2.5 million won, or approximately $1,800.
For example, an investor earning 5 million won from Bitcoin during a year would first deduct the 2.5 million won exemption. The remaining 2.5 million won would be taxable, resulting in a tax liability of 550,000 won under the proposed system.
One controversial feature is that crypto losses cannot be carried forward into future tax years. An investor who records a loss one year but earns a profit the following year would still owe tax on the later gains.
Some Lawmakers Want the Tax Scrapped Entirely
Delaying taxation until 2030 is not the only proposal under consideration. Another People Power Party lawmaker, Song Eon-seok, introduced legislation in March that would completely remove the crypto income tax provisions.
The party has framed the issue partly around tax parity between cryptocurrencies and traditional investments, arguing that taxing crypto gains while ordinary stock gains remain effectively tax-free creates unequal treatment between investment markets.
The government has defended its approach by pointing toward other major economies where cryptocurrency profits are taxed.
Koo has cited countries including the United States, Japan and the United Kingdom, although South Korea does not currently operate an equivalent broad capital gains tax system.
Crypto Tax Infrastructure Is Already Being Built
Despite the renewed political challenge, South Korean authorities are already preparing the infrastructure required to enforce cryptocurrency taxation.
The National Tax Service has established a dedicated digital asset unit, while international reporting standards are expected to provide authorities with greater visibility into crypto holdings outside the country.
South Korea will participate in the OECD Crypto-Asset Reporting Framework (CARF), allowing tax authorities to receive information about residents’ overseas cryptocurrency activities from participating jurisdictions.
Countries including Japan, Germany and France are among the jurisdictions participating in the information-sharing framework.
For now, the official start date remains January 1, 2027. However, Jeong’s proposal adds another political battle to a crypto tax regime that has already been postponed multiple times since its original 2022 implementation date.
