South Korean Lawmakers Revive Crypto Tax Delay Bills as Government Prepares for January Rollout

South Korean lawmakers have revived bills to delay taxation of virtual assets ahead of the planned January start date, but the government is pressing ahead with preparations for implementation on schedule.

According to industry officials on Aug. 13, People Power Party lawmaker Kim Sang-hoon plans to propose an amendment to the Income Tax Act this month that would delay taxation of crypto investment income from January 2027 to January 2029. The bill is currently under review by the National Assembly Secretariat’s legislative office.

It is the second bill from the ruling party this week seeking to postpone crypto taxation. On Aug. 10, People Power Party lawmaker Jeong Seong-guk proposed a separate amendment to delay the start date to January 2030. He argued that taxes should be imposed only after investor protection measures and the taxation framework are fully in place.

Under current law, income from the transfer or lending of virtual assets will be taxed as miscellaneous income starting in January 2027. Annual gains exceeding 2.5 million won, or about $1,800, will be taxed at 22%, combining a 20% miscellaneous income tax and a 2% local income tax.

South Korea has already postponed crypto taxation three times. After the relevant tax system was introduced, the start date was pushed back to 2023, then 2025, and later 2027. Unless another delay bill passes the National Assembly this year, taxation will begin as scheduled on Jan. 1, 2027.

Government Presses Ahead With Preparations

The government, however, says there will be no further delay. Deputy Prime Minister Koo Yun-cheol, who also serves as finance minister, told the National Assembly’s Planning and Finance Committee late last month that the government would proceed with crypto taxation from January 2027 as planned. He added that the system would be implemented first and revised later if necessary.

The National Tax Service has also stepped up work on a public notice setting out taxation standards for digital assets. On Aug. 11, the agency’s Digital Asset Division was reported to have completed the formation of a 12-member advisory panel for the notice. The panel will hold its first meeting on Aug. 24 to begin discussions on the standards. The agency plans to release guidelines as early as October.

The notice will lay out methods for calculating acquisition costs and tax treatment for various types of digital-asset transactions, including staking, airdrops, hard forks and token swaps. The National Tax Service is also reviewing whether newer transaction types have emerged as it drafts more detailed standards.

Investors Complain About Tax Burden Amid Sluggish Market

Some crypto investors say a January 2027 rollout would further increase the burden on trading. Concerns have grown as the market has yet to show a clear recovery since the large-scale liquidation event in October 2025.

One investor, identified only as A, said most holdings were wiped out in the October 2025 liquidation wave and only the original principal has recently been recovered. Because South Korea does not allow loss carryforwards for crypto taxes, the investor said, taxes could still be due even without any real profit from coin trading.

A loss carryforward allows investment losses incurred in one year to be deducted from profits in later years when calculating taxes. The mechanism reflects cumulative gains and losses over multiple years. Under South Korea’s crypto tax system, gains and losses within the same tax year can be offset, but losses from a previous year cannot be carried forward to the next year. That means an investor who loses 10 million won, or about $7,200, in the first year and then earns 10 million won the following year, merely recovering the original principal, would still face tax on the second-year gain. In effect, tax could be imposed even when cumulative profit over two years is zero.

Some investors also argue that imposing taxes before establishing sufficient institutional safeguards for investor protection is premature. An investor identified as B said it was difficult to understand why the government would move forward with taxation before enacting a Digital Asset Basic Act. The investor said the purpose of delaying implementation until 2026 had been to buy time to improve related systems, and that starting taxation before investor protections are fully in place would be too early.

Still, others say implementation should now be accepted after repeated delays. A retail investor identified as C said it was regrettable that the financial investment income tax had been abolished while crypto taxation was repeatedly postponed, effectively creating a structure in which ordinary stock investors are not taxed while crypto investors alone face the levy. Even so, the investor said crypto taxation has already been delayed several times and the government appears determined to proceed. If authorities follow through on their pledge to revise the system after implementation, the investor added, shortcomings should be addressed.