Crypto Tax Repeal Petition Nears 50,000 Signatures, but Chances in National Assembly Are Slim

Investor opposition is building 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 overhauled, citing unequal treatment versus stocks and other assets. Still, the chances of an actual policy rewrite appear slim because tax authorities remain committed to the rollout and parliamentary petitions rarely lead to legislative action.

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 more than 30,000 signatures in two days.

The petitioner argued that cryptocurrencies are being treated unfairly compared with traditional financial assets such as stocks. “While the stock market effectively remains under a tax-exempt system, virtual assets are immediately subject to taxation with a low deduction threshold of 2.5 million won ($1,810),” the petition said. It also criticized the classification of crypto as “other income,” under which, unlike stocks, loss carryforwards are not allowed.

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

If crypto remains classified as other income, investors would face a 22% tax rate and could also see higher health-insurance premiums, according to the petition. That would saddle investors with double or triple burdens and could eventually drive domestic capital overseas and weaken the industry. The petition called for the tax to be abolished.

Under the National Assembly’s public petition system, a petition that gathers 50,000 signatures within 30 days of posting is referred to the relevant standing committee. At the current pace, that threshold appears well within reach. Even if the petition is referred, however, the odds of it leading to legislation are low.

In the previous 21st National Assembly, 194 of 1,261 submitted petitions received at least 50,000 signatures. Only 33, or 17%, were processed by standing committees. Of those, 24 were not advanced to a plenary session. Eight were discarded after similar bills reflecting the petitions’ aims were prepared, and one was withdrawn. The remaining roughly 160 petitions were automatically scrapped when lawmakers’ terms ended.

The picture is little different in the current 22nd National Assembly. As of May 15, 249 petitions that met the requirements had been referred to standing committees. Of those, 241 remain pending without review. The eight that moved forward ended either in rejection for plenary consideration in six cases or disposal after alternative legislation in two.

A crypto-tax petition has already failed once. A petition posted in November 2024 to abolish the tax drew more than 80,000 signatures and was referred to a standing committee. It was later discarded without reaching the plenary floor. Still, after strong public backlash, the National Assembly passed an alternative measure in December 2024 to delay implementation by two years.

The government, which holds the key to virtual-asset taxation, remains firm. Tax authorities, including the Ministry of Economy and Finance, plan to launch the computerized system for taxing gains from virtual-asset transfers and lending on Jan. 1, 2027, as scheduled. Their position is that there is no longer any justification for another delay, given tax fairness with other income such as wages and business income.

Under the plan set to take effect next year, a flat 22% tax rate, including local income tax, will apply to crypto investment gains above the basic deduction of 2.5 million won ($1,810). Because the income is classified as other income, investors will not be allowed to carry forward current-year losses to offset profits in the following year.