South Korea’s ruling party has formally proposed postponing the crypto income tax that is currently due to begin on Jan. 1, 2027. The move would delay a levy that was written into law in 2020 but has already been pushed back several times.
According to the proposal outlined by the party leader, the government should first put in place the Digital Asset Basic Act, described as a comprehensive legal framework for crypto, and allow both companies and investors more time to adjust to the new rules.
Tax plan would apply to gains above 2.5 million won
Under the current schedule, South Korea would start taxing certain crypto-related income from the beginning of 2027. The plan calls for a 22% tax, including local tax, on annual gains from the transfer or lending of crypto assets that exceed a basic deduction of 2.5 million won, or about $1,868.7.
The latest proposal does not change those headline terms. Instead, it focuses on delaying the start date before the tax takes effect.
A fourth postponement is now on the table
If lawmakers accept the ruling party’s request, it would amount to the fourth delay for the crypto income tax since it was first legislated in 2020. The latest proposal therefore extends a long-running pattern in which implementation has been deferred even after the tax was formally established.
The party leader explicitly acknowledged those previous delays while arguing that another postponement should come with a clearly defined deferral period rather than an open-ended pause.
Party says legal and technical groundwork should come first
In explaining the proposal, the ruling party leader said South Korea should first enact the Digital Asset Basic Act before starting to collect the tax. The measure was presented as a prerequisite because it would provide a broader legal framework for the domestic crypto sector.
The leader also said authorities should use the extra time to prepare the practical conditions needed for enforcement. Those preparations were described as including the use of overseas transaction information, verification of IT systems and taxpayer guidance, alongside a broader adjustment period for businesses and investors.
What comes next
For now, the crypto income tax remains scheduled to take effect on Jan. 1, 2027, unless the proposed deferral is approved. The next confirmed step is consideration of whether South Korea will accept the ruling party’s plan to delay implementation again.
Until that happens, the key issue is not a redesign of the tax itself but whether the government decides that the legal, technical and administrative prerequisites identified by the party should be completed before the levy begins.
Source: www.theblock.co