At a glance

  • Kim Min-seok, leader of the ruling Democratic Party, said on Thursday that the crypto income tax due on 1 Jan 2027 must be settled this year, and that it is time to discuss whether to implement it as is or change it, Yonhap reported.
  • Lee Eok-won, chairman of the Financial Services Commission (FSC), told lawmakers the tax should take “various circumstances” fully into account, according to Yonhap (our translation).

Kim said he had raised the issue on Wednesday with Lee Hyung-il, the deputy prime minister and finance minister, and proposed that the government “do a final check and reach a conclusion”, Yonhap reported in Korean.

“Recently there have been louder voices and many different opinions on this, so yesterday I raised that it is time for a focused review at this final stage,” Kim said, according to Yonhap (our translation).

The tax was introduced through a 2020 amendment to the Income Tax Act and has been postponed three times since, Yonhap noted.

What the regulator said

Lee Eok-won spoke at the National Assembly’s National Policy Committee, which oversees the FSC, during the final session of its annual audit of government bodies, Yonhap reported.

Song Eon-seok of the opposition People Power Party, who has filed a bill to abolish the tax, asked him about scrapping or deferring it. Song argued that Korea is taxing crypto before deciding what digital assets are and how to regulate them, and said the Digital Asset Basic Act should come first.

Lee said bills on digital assets were in final consultations and that the FSC would move “as quickly as possible” so lawmakers could debate them. He gave no date, as when he described final consultations on the act on 8 Oct.

On the tax, he said he understood that differing views were being collected, as the deputy prime minister had also said, according to Yonhap.

What is at stake

The tax would apply 22%, including local income tax, to annual crypto gains above ₩2.5 million (about $1,880 or €1,670). The government is still carrying out the administrative steps for a January start, Yonhap reported, though parts of the ruling camp call it premature.

On Tuesday, the finance ministry heard the operators of Upbit, Bithumb, Coinone, DigitalX and Gopax at Tuesday’s meeting with the five won-market exchanges, without saying whether it would back a delay. A Democratic Party lawmaker has already filed the bill that would push the start to 2029.

What’s next

The National Tax Service (NTS) plans to finish a draft of its crypto tax guidance by 30 Oct and publish it in November, Korean outlet Digital Asset reported, according to The Block. This has not been independently confirmed by CryptoWatchDesk.

Kim wants the question settled this year. Unless the law changes first, the tax starts on 1 January.

This is not tax advice.

This article is for information only and is not investment advice.