South Korea Crypto Tax Repeal Petition Nears 30,000 Signatures in Two Days, Passage Unclear

Investor opposition is mounting over South Korea’s plan to begin taxing virtual assets, or cryptocurrencies, in January 2027. Support is surging for a National Assembly petition calling for the tax to be scrapped and the system to be fully redesigned, arguing that the rules treat crypto less favorably than stocks and other assets. Still, the chances of an actual policy overhaul appear slim, with tax authorities committed to the rollout and the legislature’s petition processing record remaining poor.

According to the National Assembly’s public petition website on May 15, a petition titled “Delay the Implementation of Virtual Asset Taxation and Fully Redesign the System,” posted on May 13, drew nearly 30,000 signatures in two days.

The petitioner argued that the tax framework is unfair compared with traditional financial assets such as stocks. While the stock market effectively remains untaxed, virtual assets would be taxed immediately after a basic deduction of 2.5 million won ($1,800), the petitioner wrote. Crypto is also classified as other income, unlike stocks, which means investors cannot carry forward losses to offset future gains.

The petition also criticized the lack of investor protections. Unlike the stock market, which has short-selling regulations, listing reviews and investor protection funds, the crypto market still faces risks from fraudulent projects and weak listings, yet authorities are trying to impose taxes first, it said.

The petitioner also argued that classifying virtual assets as other income would subject investors to a 22% tax rate and could increase their health insurance premium burden. The petition called for the tax to be abolished, saying excessive taxation would place double or triple burdens on investors, drive domestic capital overseas and undermine the industry.

Under the National Assembly’s public petition system, a petition is referred to the relevant standing committee if it collects 50,000 signatures within 30 days of being made public. At the current pace, that threshold should be reached easily. Even if it is sent to a committee, however, the odds of it leading to legislation remain low.

During the 21st National Assembly, 194 petitions out of 1,261 submissions gathered at least 50,000 signatures. Only 33, or 17%, were processed by standing committees. Of those, 24 were ruled unfit to move to a plenary session. Eight were discarded after similar bills reflecting part of the petitions’ intent were prepared instead, and one was withdrawn. The remaining roughly 160 petitions were automatically scrapped when lawmakers’ terms expired.

The picture is little different in the 22nd National Assembly. As of May 15, 249 petitions had met the requirements and been referred to standing committees. Of those, 241 remain pending without review. The other eight ended either with rejection before a plenary vote, six cases, or disposal after being reflected in alternative legislation, two cases.

A crypto tax petition has already failed once. A petition calling for the abolition of virtual asset taxation, posted in November 2024, won more than 80,000 signatures and was referred to a standing committee. It was later discarded without reaching the plenary session. Still, after public opposition intensified, the National Assembly passed an alternative measure in December 2024 to delay implementation by two years.

Meanwhile, the government’s position remains firm. Tax authorities including the Ministry of Economy and Finance plan to launch the electronic system for taxing income from virtual-asset transfers and lending on Jan. 1, 2027, as scheduled. They argue there is no longer any justification for another delay, citing tax fairness with other forms of income such as wages and business income.

Under the tax plan set to take effect next year, crypto investment gains above the basic deduction of 2.5 million won ($1,800) will face a flat 22% tax rate, including local income tax. Because the income is classified as other income, investors will not be allowed to carry forward current-year investment losses to offset gains in the following year.