South Korean investors push for fourth crypto tax delay as regulators stand firm

The push to once again postpone South Korea's planned taxation on cryptocurrency income continues, while regulators insist on implementing the 22% tax as scheduled.

The country currently plans to introduce the tax on Jan. 1, 2027, applying a 22% effective rate (20% base plus 2% local tax) to annual gains from digital assets above a 2.5 million won ($1,856) basic deduction. This covers income from selling, transferring, and lending crypto assets.

The plan has already been pushed back three times since it was first discussed in 2022. Still, local investors and industry participants continue to push for a further delay, citing inadequate tax infrastructure and crypto market structure. 

Many have taken this matter to the National Assembly's electronic petition system, which allows citizens to propose legislative changes. Petitions receiving 50,000 verified signatures within 30 days are automatically referred to the relevant standing committee for official review. The petition seeking to postpone the crypto tax plan by two years recently reached the 50,000-signature threshold, prompting legislative review.

"Most crypto investors are sitting on heavy losses; major Korean crypto firms are seeing operating profits fall by as much as 90%; and the whole industry is in the red," an anonymous petitioner wrote in a translated statement. "Taxing crypto now would kick away a wealth ladder for young people … imposing the tax immediately is unfair to the young in terms of equal opportunity."

The petitioner also argued that the tax would drive investors to offshore platforms, and that high market volatility would generate very little actual tax revenue. 

Earlier in May, a petition seeking to abolish the planned crypto tax reached the required 50,000 signatures just eight days after it was submitted in the system. While the petition was referred to a committee, the matter did not proceed further.

Meanwhile, the government stands firm on the plan. Lee Hyoung-Il, a nominee for the Minister of Economy and Finance, said over the weekend that the crypto tax plan is on schedule and that the National Tax Service will publish detailed tax standards later this year, according to Yonhap News Agency.