South Korean Legislators Reach Consensus to Delay Implementation of Cryptocurrency Tax Until 2027

Crypto taxation is scheduled to commence in South Korea in January 2027, following an agreement among lawmakers to delay taxes on crypto trading for an additional two years.

The Democratic Party (DP), the predominant party in the National Assembly, had threatened to obstruct the ruling People’s Power Party (PPP)’s initiative to delay the implementation.

However, the DP’s recent attempt to modify the current legislation in support of its own proposal to increase the annual tax threshold for crypto traders was unsuccessful.

Crypto Tax Launch Postponed Once More

Money Today reported that Park Chan-dae, the DP’s floor leader, announced the party’s acceptance of the government’s proposal. Park made this statement during a press conference at the National Assembly on December 1.

DP Floor Leader Park Chan-dae, discussing crypto tax launch plans at a press conference at the South Korean National Assembly on December 1. (Source: MBC News/YouTube/Screenshot)

Park indicated that the decision was reached “after thorough discussions regarding the postponement of taxation on virtual assets.”

He acknowledged that “additional institutional preparation” was “necessary” before tax authorities began taxing crypto traders.

This sentiment seems to reflect the views recently expressed by DP leader Lee Jae-myung, who contended that crypto taxation was not yet “systematically feasible.”

“We will advance the government’s income tax law amendment bill to defer taxation on virtual assets at the National Assembly plenary session on December 2.”

Park Chan-dae, lawmaker and DP Floor Leader

It appears that the DP is making this concession to redirect its focus toward legislation concerning the separate taxation of dividend income and the reduction of inheritance tax, both of which it opposes.

A South Korean crypto trader identified as Kim shared with Cryptonews.com on December 1:

“This entire situation regarding crypto tax is a complete mess. And politicians are entirely responsible for all of this. As a crypto investor, I am certainly pleased not to pay tax. However, this situation has been poorly managed by the government, the opposition, and everyone involved.”

People Power Party Rep. Na Kyung-won suggested implementing a policy akin to France’s “Pacte Civil de Solidarite” to provide legal protection for children born to unmarried parents.https://t.co/i889BwHZe1

— The Korea Herald 코리아헤럴드 (@TheKoreaHerald) December 1, 2024

Third Delay

Lawmakers initially voted in favor of initiating crypto taxation in December 2020, with the levy originally set to begin on January 1, 2021.

However, its introduction has been delayed twice since then, both times with only weeks remaining before the scheduled launch.

Korea’s exports grow for 14th month in Nov. on record shipments of chipshttps://t.co/9iqTzZH7h2

— The Korea Times (@koreatimescokr) December 1, 2024

Last week, DP lawmakers attempted to persuade the government to consider an alternative bill. This bill aimed to implement crypto taxation according to the original timeline (January 2025).

However, it also suggested increasing the annual threshold to 50 million won (approximately $36,000), which would have aligned crypto investors with stock market trading. The party reportedly asserted:

“Most investors, aside from a very small number of large-scale traders, will not be subject to taxation [under our proposal].”

Nevertheless, the PPP seems to have rejected the DP’s various efforts to push its bill through National Assembly subcommittees last week.

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