Investors Make Fourth Attempt to Delay Crypto Tax in South Korea

South Korea is facing renewed calls to postpone its planned crypto tax, despite the government maintaining that the levy will take effect as scheduled at the beginning of 2027.

Under the current proposal, digital asset investors would face an effective tax rate of 22% on annual crypto profits exceeding 2.5 million won (about $1,856). The rate consists of a 20% national tax and an additional 2% local levy. The rules are intended to cover gains generated through activities including the sale, transfer and lending of virtual assets.

The introduction of the measure has already been delayed on three occasions since the proposal first emerged in 2022. However, investors and representatives of the crypto sector are once again seeking more time, arguing that South Korea’s tax framework and market infrastructure are not yet sufficiently prepared.

The latest campaign has gained traction through the National Assembly’s online petition platform. Under the system, petitions that collect at least 50,000 valid signatures within a 30-day period are forwarded to the appropriate parliamentary standing committee for consideration. A proposal calling for the cryptocurrency tax to be postponed for another two years recently crossed that threshold, triggering a formal review.

An anonymous petitioner cited difficult market conditions as a major reason for delaying the measure. According to a translated version of the submission, many cryptocurrency investors are currently carrying significant losses, while some domestic digital asset companies have experienced sharp declines in operating profits.

The petition also raised concerns about younger investors, arguing that imposing taxes during a prolonged market downturn could reduce opportunities for people seeking to build wealth through digital assets. It further warned that a domestic tax could encourage traders to move their activities to overseas exchanges.

Another concern outlined in the petition was the unpredictable nature of crypto markets. Supporters of a delay contend that substantial price swings could limit the amount of revenue collected by the government while creating additional compliance challenges.

The latest effort follows another petition filed in May that called for the crypto tax to be scrapped altogether. That campaign secured the necessary 50,000 signatures within only eight days. Although the proposal was sent to a parliamentary committee, it did not advance beyond that stage.

For now, officials show little indication that another postponement is being considered. Lee Hyoung-Il, nominated to lead the Ministry of Economy and Finance, said that the tax remains on track for implementation in January 2027.

The National Tax Service is expected to release more detailed guidance on how the cryptocurrency taxation system will operate later in the year. The global crypto industry, including companies like Riot Blockchain Inc. (NASDAQ: RIOT), will be watching how the implementation of this tax law progresses and the effects it has on the industry in South Korea.

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