South Korea’s ruling Democratic Party has formally asked the government to postpone the planned taxation of income from cryptocurrency and other virtual assets, which is currently scheduled to begin on January 1, 2027.
Party leader Kim Min-seok announced the decision on Wednesday following a meeting of the party’s supreme council at the National Assembly in Seoul.
The proposal emerged after internal reviews involving the National Assembly’s Strategy and Finance Committee, consultations between the party and government officials, and discussions with businesses in the virtual asset sector.
Kim stated that party members had agreed it would be preferable to first enact the Digital Asset Basic Act—a comprehensive legal framework covering issuance, trading, disclosure, and other aspects of digital assets—before applying the tax.
He emphasized the need to give companies and investors time to adjust, following a thorough examination of taxation principles, conditions in the domestic industry, and fairness among market participants.
This marks what would become the fourth delay of the measure since it was first written into law in 2020 through an amendment to the Income Tax Act.
Previous postponements have repeatedly pushed back the original target date.
Under the existing rules, gains from the transfer or lending of virtual assets that exceed an annual basic deduction of 2.5 million won (roughly $1,860–$1,880) would face a combined tax rate of 22 percent, comprising the national income tax component and a local income tax surcharge.
Kim acknowledged the history of earlier deferrals and indicated that the party intends to define a clear postponement period this time while completing necessary preparatory work.
That includes arranging for the use of overseas transaction information, verifying related information technology systems, and improving guidance for taxpayers.
Within the party, views had differed: some lawmakers argued that proceeding as scheduled was important for maintaining policy credibility, while others cited incomplete infrastructure as a reason for further delay.
The leadership ultimately settled on the postponement recommendation.
The move aligns with broader concerns about readiness.
The Digital Asset Basic Act remains under development, with government officials and ruling-party lawmakers aiming for introduction and passage in the near term to establish clearer rules for the sector.
Separately, discussions have referenced the need to coordinate with international information-sharing arrangements under the OECD’s Crypto-Asset Reporting Framework, which some have suggested could support a later start date around 2029 once cross-border data exchange is operational.
The formal proposal itself does not immediately alter taxpayers’ obligations; any further delay would require an amendment to the Income Tax Act.
The announcement comes amid ongoing industry requests for more time and previous signals from the presidential office weighing the practical challenges of implementation. With the current start date approaching, the ruling party’s formal position is expected to shape subsequent government-party consultations and legislative steps in the coming weeks.
