South Korea’s ruling party leader has called for a decision by year-end on the cryptocurrency income tax, originally scheduled to take effect in January 2027. According to Yonhap News Agency, Democratic Party leader Kim Min-seok said on the 22nd that the crypto tax “must be clarified this year,” calling for a decision before year-end on whether to levy it as originally proposed or first strengthen the system. The same day, when asked at the National Assembly whether taxation should be abolished or delayed, Financial Services Commission Chairman Lee Eog-weon replied only that “various circumstances should be fully considered,” and disclosed that the Digital Asset Basic Act had entered the final stage of negotiations.
Kim Min-seok: Tax as planned or strengthen the system—decision needed this year
Kim Min-seok said on the Democratic Party of Korea’s YouTube program on the 22nd that there have recently been many calls and differing opinions about crypto taxes. “Yesterday, I said that now is the time for one final, focused review.” He also said he had proposed to Lee Hyoung-il, Deputy Prime Minister and Minister of Finance and Economy, who visited the National Assembly on the 21st, that they “conduct a final review and then reach a conclusion.”
Kim Min-seok went on to say: “Should we tax under the original proposal, or strengthen the system somehow? Isn’t it time to start a focused discussion?” In written materials submitted to the National Assembly in September as a ministerial nominee, Lee Hyoung-il had said that taxation would begin as scheduled in January next year. The Block said Kim Min-seok’s remarks indicated a more flexible government position than its previous insistence on a 2027 timeline.
South Korea’s crypto tax was introduced in a 2020 amendment to the Income Tax Act and has been postponed three times so far.
Lee Eog-weon: Digital Asset Basic Act in “final negotiations”
Lee Eog-weon responded to questions from People Power Party lawmaker Song Eon-seok during a comprehensive audit by the National Assembly’s Political Affairs Committee. Song argued that the fundamental nature of digital assets and the direction of policy had yet to be determined, but taxation was being introduced first. He called for the Digital Asset Basic Act to be enacted before taxes were imposed. Lee Eog-weon replied: “We are in the final negotiations on bills related to digital assets, and will move them to deliberation as soon as possible.”
On crypto taxes, he said: “The Deputy Prime Minister also seems to have mentioned that there are various views at present, and as far as I know, they are being gathered.”
Yonhap reported on the 18th that the Financial Services Commission is consulting with relevant agencies and completing the final work on the government’s bill. The main points of contention include limiting major shareholders’ stakes in crypto exchanges to 15%–20%, and initially allowing won stablecoins to be issued by consortia in which banks hold a majority stake. This continues the debate over banks and fintech companies competing for the right to issue stablecoins, which surfaced when the ruling party proposed a bill in April this year. Yonhap said the authorities could complete the government’s bill as early as the end of this month and, following consultations between the government and ruling party, pursue legislation in the form of a lawmakers’ bill.
22% tax rate unchanged; four bills in the National Assembly seek repeal or delay
Under current rules, annual income from the transfer or lending of crypto assets is taxed at a combined rate of 22% in other income tax and local income tax, after a basic deduction of 2.5 million won. The government is continuing administrative procedures based on implementation next January. On October 13, the National Tax Service told the National Assembly that a notice setting out the tax criteria is expected to be issued in November after consultations with the Ministry of Finance and Economy.
In the National Assembly, People Power Party lawmaker Song Eon-seok proposed repealing the provisions on taxing crypto income, while two other lawmakers separately proposed delaying implementation. A ruling party lawmaker also introduced the first bill to delay implementation on the 16th, changing the start date to January 1, two years after the year in which countries first exchange crypto transaction information. The rationale is that the OECD’s Crypto-Asset Reporting Framework (CARF) will not begin exchanging data until next year, while the United States will not participate until 2029. Until then, it will be difficult to obtain records of transactions on overseas exchanges, leaving users of domestic exchanges to bear the bulk of the tax burden.
On the 20th, the Ministry of Finance and Economy also held a meeting with exchange operators including Dunamu, Bithumb, and Coinone, as well as the Digital Asset Exchange Alliance (DAXA). Industry representatives called for clear tax criteria, time for businesses to prepare reporting systems, and tax fairness between users of domestic and overseas exchanges. The ministry’s First Vice Minister, who chaired the meeting, said that the principle of “income is taxable” should be respected, but that tax infrastructure and market regulations must be in place at the same time. The ministry will conduct a comprehensive review of preparations and consult closely with relevant departments.
This article, South Korea’s ruling party leader calls for crypto tax decision this year as Digital Asset Basic Act enters final negotiations, originally appeared on .
【Further Analysis】
【My Further Perspective】
South Korea is at a pivotal juncture in formalizing cryptocurrency regulation and implementing taxation. The ruling party leader’s more flexible stance and the Digital Asset Basic Act entering its final negotiations suggest that the government recognizes that imposing taxes hastily—before infrastructure and international information exchange, such as the OECD’s CARF, are fully aligned—could not only exacerbate unfair competition between domestic and overseas exchanges, but also lead to capital outflows. The contest over stablecoin issuance rights between banks and fintech companies shows that South Korea is actively bringing crypto assets into the traditional financial compliance framework, laying the groundwork for the country to become a major hub for compliant crypto activity in Asia.
【Market Impact】
South Korean retail investors account for a very large share of global crypto trading volume, often driving the so-called kimchi premium. If the tax reform is ultimately delayed or accompanied by adequate measures, this would ease concerns in the short term that taxes could severely damage market liquidity, making the impact neutral to mildly positive. The direct link to U.S. or Taiwanese stock markets is limited. However, if South Korea’s crypto legislation is successfully implemented, it could boost global institutional investors’ confidence in the growing clarity of crypto regulation in Asia, indirectly benefiting U.S.-listed crypto-related stocks such as Coinbase and MicroStrategy, as well as traditional financial institutions expanding into crypto.
【What to Watch】
Keep a close watch on whether South Korea’s Ministry of Finance and Economy and the Financial Services Commission can reach a final political consensus by year-end on whether to “introduce the tax as scheduled, strengthen the system, or delay it again.” The tax criteria notice expected in November, the National Assembly’s progress in reviewing bills to delay implementation, and the final provisions in the Digital Asset Basic Act concerning ownership limits for major exchange shareholders and stablecoin issuance rights will also be key indicators of the direction of South Korea’s market.
【Risk Disclaimer】
If subsequent political negotiations break down and lead to a rushed implementation of the tax regime, this could trigger panic selling by users of South Korean domestic exchanges or the transfer of funds to compliant overseas platforms, potentially causing regional liquidity tightening. Investors should guard against market volatility caused by policy reversals and watch for arbitrage opportunities and compliance costs arising from insufficient coordination among international regulators.