South Korea Fails to Agree on Further Crypto Tax Delay

South Korea’s ruling Democratic Party and the government failed to decide whether to further delay the cryptocurrency tax scheduled to take effect in January 2027 following consultations at the National Assembly on Oct. 28.

The meeting had been expected to be the final consultation before the tax took effect. The Democratic Party will conduct further internal reviews before deciding whether to seek another delay.

Oh Ki-hyoung, the party’s liaison on the National Assembly’s Finance and Economy Committee, noted that lawmakers remain divided. Some believe the tax should begin after three postponements, while others want outstanding legal, regulatory and administrative issues addressed first.

The party discussed the tax at a lawmakers’ meeting on Oct. 27 and agreed to gather more opinions before deciding whether to delay it again. Support for another postponement is growing within the ruling bloc, although party officials maintain that the unresolved issues require further discussion even if the start date changes.

Democratic Party leader Kim Min-seok urged lawmakers to consider whether taxpayers would lose trust in the system if the tax took effect without reflecting the cryptocurrency market and its trading environment. He also called for discussions on gaps in tax infrastructure and concerns among younger investors.

Cho Seung-rae, chairman of the National Assembly’s Finance and Economy Committee, recommended assessing whether the tax could be administered in practice rather than focusing on tax principles. He described a practical assessment of the conditions for taxation as the basis for resolving the issue.

Lee Hyoung-il, deputy prime minister and minister of finance and economy, noted that experts and industry representatives generally support taxing cryptocurrency income. They have also urged revisions to reflect market changes since the framework was written into law in late 2020.

Lee added that policymakers should consider international tax policies and fairness between users of South Korean and overseas exchanges. “The government is carefully weighing a reasonable approach that the public can accept and that can be implemented stably on the ground,” he said.

The cryptocurrency tax framework was established in 2020 and has been postponed three times. Unless lawmakers approve another delay, it will take effect in January. Under the current rules, annual income from transferring or lending digital assets above a basic deduction of 2.5 million won would be taxed at 22%, including local income tax.

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