South Korea’s opposition party wants to kill the crypto tax before it ever starts. A formal bill is now on the table, and for the first time, the ruling party isn’t shutting the conversation down.
Quick Background on the Crypto Tax
South Korea has been trying to tax crypto gains since 2022. The plan never launched. It got pushed to 2023, then 2025, then 2027. The current version would take 22% of annual profits above 2.5 million won, about $1,665. That’s a 20% national income tax plus a 2% local charge.
The delays weren’t purely political theater. Regulators genuinely couldn’t figure out how to track income from staking, airdrops, or trades on foreign platforms. The National Tax Service is now building an AI monitoring system for the 2027 launch. Whether that launch actually happens is now the real question.
Also Read: South Korea Plans to Cap Corporate Crypto Investments at 5%
Why This Bill Exists
Late 2024 changed the political math. The National Assembly voted to repeal the Financial Investment Income Tax, a levy that would have applied to gains from stocks, bonds, and funds. It passed 204 to 33. Practically unanimous.
That vote created an obvious problem. Stocks are now exempt. Crypto isn’t. The People Power Party’s new bill argues that gap is simply unfair, and it’s hard to disagree with the logic on its face. Song Eon-seok, the party’s floor leader and bill sponsor, is pushing for a full amendment to the Income Tax Act, not a delay, not an exemption tweak, a complete removal.
The bill also brings up how the US SEC has been classifying most cryptocurrencies as commodities lately. The point being made is that treating crypto more harshly than commodity investments lacks a coherent basis when even American regulators aren’t doing it.
The Market That Makes This Matter Globally
South Korea isn’t a small player here. The Financial Services Commission put the country’s domestic crypto market at 95.1 trillion won, around $63.4 billion as of June 2025. Close to one in five South Koreans holds or trades digital assets.
There have been periods where trading volumes on Upbit and Bithumb rivalled the Korean stock exchange on the same day. That’s the kind of market participation that gives lawmakers pause before they do anything that might spook retail investors.
Capital has also been quietly leaving. Ahead of previous tax deadlines, significant funds moved from local exchanges to overseas platforms. It didn’t go unnoticed inside the Finance Ministry.
Also Read: South Korea Postpones Crypto Rules After Stablecoin Issuance Deadlock
Where Things Actually Stand
The Democratic Party controls enough seats to block or pass this. Kim Han-gyu, their senior deputy floor leader for policy, said they’d discuss it. He also made clear nobody in the party had seriously pushed for it before now.
That’s not a yes. But it’s not a no either, which is more than this proposal has ever gotten from the ruling side. The Democrats backed the FIT repeal last year. Opposing crypto tax relief on consistency grounds now puts them in an awkward spot politically, and they know it.
The 2027 deadline is still live. Nothing changes until a vote happens. But the conversation has shifted in a way it genuinely hasn’t before.
Has South Korea officially scrapped the crypto tax?
No. A bill has been filed by the People Power Party, but it still needs to pass a full National Assembly vote. The 22% crypto tax remains scheduled for January 2027.
Also Read: Mirae Asset Eyes $100M Deal to Buy Korean Crypto Exchange Korbit
Who does the current plan actually affect?
Anyone making more than 2.5 million won annually from crypto, around $1,665. Below that, no tax applies under the current proposal.
Why has this been delayed four separate times?
Partly technical. Tracking gains from DeFi, staking, and foreign exchanges is genuinely difficult. Partly political. Nearly 20% of the country trades crypto, and no party wants that voter bloc angry.
What happens if the bill fails?
The January 2027 launch proceeds as planned. The National Tax Service is already building the enforcement infrastructure for it.
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