South Korea’s Democratic Party Formally Asks Government to Delay Crypto Income Tax, Enact Digital Asset Basic Act First

South Korea’s Democratic Party has formally asked the government to again delay a tax on virtual-asset income that is currently scheduled to take effect in January next year.

Kim Min-seok, the party’s leader, said at a Supreme Council meeting at the National Assembly on November 4 that the party had decided to seek a later start date for the tax.

He said the party had formed a consensus that related systems should be put in place before taxation begins, after consulting with the government through the National Assembly’s finance committee and gathering views from the virtual-asset industry.

In particular, the party concluded that it would be appropriate to first enact a Digital Asset Basic Act after reviewing the basic principles of taxation, conditions in the domestic digital-asset industry and fairness among investors. The goal is to establish an overarching regulatory framework for the market through legislation and then give companies and investors enough time to prepare.

Still, the party plans to set a clear deadline for the postponement this time, reflecting concerns over repeated delays. It also plans to carry out preparatory work needed for implementation, including securing overseas trading data, verifying the tax system and building a taxpayer guidance framework.

A tax on virtual-asset income has already been postponed three times since the relevant law was enacted in 2020 and is currently set to take effect in January 2027. Under current rules, annual income from trading or lending virtual assets would be taxed at 22%, including local income tax, on the amount above a 2.5 million won ($1,810) deduction.