The ruling Democratic Party in South Korea has formally asked the government to postpone the 22% crypto income tax slated for Jan. 1, 2027, but has not disclosed the length of the delay.
South Korea’s ruling Democratic Party formally requested that the government defer the 22% crypto income tax scheduled to take effect on Jan. 1, 2027. Party chief Kim Min‑seok announced the proposal to the National Assembly’s Supreme Council on Nov. 4, citing the need for a comprehensive legal framework before taxing virtual‑asset earnings.
According to Unchained, Kim Min‑seok said the party’s stance emerged after consultations with the finance committee and meetings with crypto businesses. The Democratic Party emphasized that the Digital Asset Basic Act – a yet‑unpassed law intended to set industry standards – should be enacted first to give companies and investors an adaptation period. The party pledged to set a clear deferral timeline and to prepare supporting measures such as overseas transaction reporting and tax‑guidance protocols.
While the party did not name a specific period, reports from Electronic Times suggest that a two‑year postponement is under discussion, which would push the tax start date to early 2029. This aligns with earlier government indications that a Jan. 2029 implementation is being considered, as noted by Unchained on Oct. 26.
The proposal remains a recommendation; the Income Tax Act must still be amended by the National Assembly before the original Jan. 1, 2027 deadline. Deputy Prime Minister and Finance Minister Lee Hyung‑il indicated he would decide after careful deliberation, according to Fnnews. The Democratic Party has signaled it will accelerate legislative changes to allow “companies to actively invest in new services and users to trade with peace of mind.”
Key developments to monitor include the final decision of the finance committee, the timing of the Digital Asset Basic Act’s passage, and any official amendment to the Income Tax Act that would set a new tax start date. Market participants will also be watching for guidance on reporting requirements and the implementation of overseas transaction data collection.
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