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FollowingMore than 50,000 South Koreans have signed a petition to postpone the cryptocurrency income tax for two years.
More than 50,000 citizens have signed a petition asking lawmakers to delay the collection of South Korea's cryptocurrency income tax for another two years. The petition has reached the threshold for the number of signatures required for congressional review, but the government still plans to implement the tax in January 2027.
Why do South Korean people oppose cryptocurrency income tax?
On August 21, people submitted complaints against the upcoming cryptocurrency income tax on the electronic petition platform of the South Korean National Assembly. As of the morning of September 14, the petition had collected 51,004 signatures in just three weeks.
Normally, if more than 50,000 verified signatures are collected within 30 days, the petition will be automatically forwarded to the relevant permanent committee for processing. In this case, the case was referred to the Congressional Strategy and Finance Committee, which is responsible for income tax laws. However, such transfers do not necessarily lead to changes in the law. The committee can only combine the petitioners 'claims with the government's position to decide whether the law needs to be changed.
There has been a previous attempt to eliminate the tax completely rather than just postpone it. The petition received 50,000 signatures and was forwarded within eight days, but in the end no substantial progress was made.
If the situation does not change, the tax law will officially take effect on January 1, 2027. At that time, profits arising from the sale, transfer or loan of digital assets will be treated as "other income" and will be taxed at a rate of 22%. This includes a 20% national basic tax rate and a 2% local surcharge. The tax is levied on annual income after deductions exceeding 2.5 million won (approximately US$1,860) per year. Income for 2027 will first be declared and paid in May 2028.
How much revenue will cryptocurrency income tax bring to South Korea?
The petitioners pointed out that taxing the financial status of the exchange would not bring significant benefits. For example, Upbit operator Dunamu revealed that after being audited by the National Taxation Office, it incurred an additional amount of approximately 22.6 billion won (approximately US$17 million) in taxes.
The petition also mentioned that in the past five years, approximately 700 trillion won (approximately US$520.5 billion) of funds have flowed to overseas crypto-related funds. Last year alone, 168 trillion won flowed overseas, of which about 5 trillion won flowed to overseas exchanges as fees every year.
The petitioners wrote in a translation statement that the current tax would deprive the younger generation of the "wealth ladder", who account for about half of South Korea's cryptocurrency investors.
This month, the Association of Digital Asset Exchanges (DAXA) told lawmakers that exchanges lacked a data network that was standardized with regulators and needed more time to build and test infrastructure.
At the same time, officials such as Vice Prime Minister and nominee for Finance Minister Li Heng Il are still pushing for the tax. In a written reply submitted to the committee on Sunday, Lee said that "implementing the tax as planned is ideal." He believes it is "appropriate" to classify crypto revenue as other income and said the State Administration of Taxation will issue detailed standards through an announcement before the end of the year. Lee Hyung-il will attend a confirmation hearing on Tuesday.
Meanwhile, opposition Common Democratic MPs submitted competing bills. Councilman Song Eun Sek wants to delete the tax clause, Councilman Cheng Sung Yu proposed postponing the start date to 2030, and Councilman Kim Sang Hoon proposed a separate amendment to set the date as 2029.
