PPP Lawmaker Kim Jae-seop Proposes Bill to Delay Crypto Income Tax to 2030

A bill has been submitted to South Korea’s National Assembly to delay the planned taxation of virtual-asset, or cryptocurrency, income by three more years to 2030. The proposal also would require virtual-asset operators, including exchanges, to provide investors with transaction data needed to calculate taxable income.

Kim Jae-seop, a lawmaker from the ruling People Power Party, said on Sept. 23 that he had introduced the amendment to the Income Tax Act. The bill would push back the start of taxation to Jan. 1, 2030, from Jan. 1, 2027, while using the grace period to improve income-calculation standards and tax-filing support systems.

Under current law, income generated from the transfer or lending of virtual assets from next year would be classified as other income and taxed. A 20% income tax would be imposed on the amount remaining after annual gains and losses are netted out and a basic deduction of about $1,800 is subtracted. Including local income tax, the effective rate would be 22%. The amendment does not change the tax rate or the deduction amount.

If the bill passes, the reference date for determining the acquisition cost of virtual assets held before the tax takes effect would be pushed back to the end of 2029 from the end of 2026. Current law recognizes the acquisition cost of existing holdings as the higher of the actual purchase price and the market price as of Dec. 31, 2026. The amendment would change that to the higher of the actual purchase price and the market price as of Dec. 31, 2029.

The measure is intended to exclude gains accumulated before the tax takes effect from taxable income. If the market price on the reference date is higher than the actual purchase price, that market price would be used. If the purchase price is higher, the purchase price would apply instead.

The bill also would delay until 2030 the implementation of rules on recognized deductible expenses when the actual acquisition cost is difficult to verify, as well as taxation and withholding provisions for nonresidents’ virtual-asset income.

The amendment would also create a new disclosure obligation aimed at helping investors file taxes. Under the bill, virtual-asset businesses would have to provide investors, by the end of February of the year after a transaction occurs, with transaction details and other data needed to calculate taxable income.

The proposal would add to existing rules requiring virtual-asset businesses to submit trading data to tax authorities by ensuring taxpayers also receive the information needed to file returns. If a business fails to meet its submission or disclosure obligations, the commissioner of the National Tax Service could order corrective action. Related provisions were also revised to allow fines of up to about $14,400 for violations of such orders.

Kim said the increasing variety of virtual-asset transactions requires improvements to income-calculation standards and tax-filing support systems, along with a review of consistency with the tax frameworks applied to other investment assets.

“As virtual-asset trading is rapidly becoming more diverse, it is important to first establish a system that allows accurate income calculation and reporting, rather than rushing implementation simply because a taxation date has been set,” he said. “The priority is to create an environment in which taxpayers can properly verify and report their trading history and income.”

He added that the amendment is meaningful not simply because it delays taxation, but because it also seeks to overhaul the tax system and put in place measures to support taxpayer reporting before the 2030 rollout.