South Korea's Ruling Party Formally Proposes Delaying Crypto Income Tax

South Korea's ruling Democratic Party officially proposed postponing the implementation of the country's virtual asset income tax on Nov. 4, pending the passage of broader sector legislation ¹. The 22% levy on crypto gains exceeding 2.5 million won was scheduled to take effect on Jan. 1, 2027 ¹.

Speaking at a Supreme Council meeting in the National Assembly, Democratic Party leader Kim Min-seok stated that taxation should follow the passage of the Digital Asset Basic Act to allow market participants an adaptation period ¹. Kim noted that the position followed consultations between ruling lawmakers and the government, centered on the Assembly's finance committee, as well as meetings with local crypto businesses ¹. Lawmakers had previously held talks as the government weighed pushing the gains tax to 2029 in what would be a fourth deferral ¹. At the time of writing, $BTC traded at $78,423, up 2.0% over 24 hours.

Regulatory Framework Before Taxation

Although Kim pledged a definite end date for this deferral, party leadership did not announce a specific timeframe ¹. Committee lawmakers have primarily discussed a two-year extension, while government officials previously considered shifting the effective date to January 2029 ¹. Kim emphasized that the party intends to finalize preparatory measures during the deferral window, including handling cross-border transaction data, computer verification systems, and taxpayer guidance ¹.

The postponement proposal does not yet carry the force of law ¹. The National Assembly must formally amend the Income Tax Act before Jan. 1, 2027, to suspend the regime, which was first enacted under a 2020 legal revision and has been delayed three times ¹. Deputy Prime Minister and Finance Minister Lee Hyung-il previously told an Oct. 22 audit that the government would decide its position after careful deliberation ¹.