Invest1 publisher2 min readPublished
Korea's fourth crypto tax delay petition drew signatures at a third of May's pace
A petition for a two-year delay reached the National Assembly's Strategy and Finance Committee with 51,004 names, and the finance minister nominee has told the committee that starting the 22% levy in January 2027 is desirable.
The Investor · Invest desk
What happened
- The petition for a two-year delay opened on the National Assembly portal on August 21 and reached 51,004 signatures by the morning of September 14, clearing the 50,000 threshold for committee referral.
- Lee Hyoung-il, the nominee for deputy prime minister and finance minister, said in written answers to the committee on Sunday that it is "desirable to implement the tax as scheduled."
- The levy charges 20% national plus a 2% local surcharge on annual gains above a 2.5 million won deduction, applies to transactions from January 1, 2027, and is first filed and paid in May 2028.
- Three People Power Party lawmakers have filed competing bills: Song Eon-seog to delete the tax clauses, Jung Sung-kook to start in 2030, and Kim Sang-hoon in 2029, the year the petition's two-year ask would also produce.
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Why it matters
- decision Anyone sitting on gains has about 15 and a half months in which a disposal falls outside the levy, and from 2027 the 2.5 million won deduction removes at most 550,000 won of tax a year.
- constraint DAXA says exchanges have no standardized data network with regulators, so the reporting system has to be built and tested before the first taxable year, and that readiness gap is the strongest ground a fourth delay could stand on.
- contradiction The petition argues the tax will raise little and points to Dunamu's roughly 22.6 billion won of additional taxes after a National Tax Service audit, an assessment that fell on a company, while the January 2027 levy taxes individual gains.
- exposure The commitment to the date rests on the written answers of a nominee whose confirmation hearing was Tuesday, so the schedule's most senior advocate is not yet in the job.
The May petition asked for abolition and reached 50,000 signatures in eight days [5]. The one now in front of the committee asked for two more years, opened on August 21 and reached 51,004 names by the morning of September 14 [2], 24 days later, or roughly 2,125 a day against at least 6,250 in May [1][2][3].
Referral is procedural. Any petition clearing 50,000 verified signatures inside 30 days goes automatically to the relevant standing committee, here Strategy and Finance, which handles income tax law [3]. All the committee can do is weigh the petitioner's case against the government's and decide whether an amendment is needed [4]. The May petition was referred and went nowhere [5].
Two sets of numbers carry the petitioner's case. On capital flight, the petition puts about 700 trillion won of crypto-linked funds offshore over five years and 168 trillion won last year, which runs 20% above the five-year average of 140 trillion [9][4], with roughly 5 trillion won a year going to overseas exchanges in fees, about 3% of last year's outflow [9][5]. On demographics, the petitioner wrote in a translated statement that taxing now would take away a "wealth ladder" for young people, who are about half of Korea's crypto investors [10].
Lee Hyoung-il, the nominee who would run the ministry that collects it, said it was "appropriate" to classify crypto gains as miscellaneous income and said the National Tax Service will publish detailed standards through a public notice before year-end [13]. That would put written rules in print about twelve months before the first taxable trade [9].
I'd expect January 2027 to hold, and the government says it plans to proceed on schedule [17]. The counter-case is the record: written in 2020 for a 2022 start, then moved to 2023, then 2025, then 2027 [16]. The start has slipped five years from the original date, and the first payment now falls in May 2028, eight years after drafting [11][7][10]. DAXA's argument is also the one that has worked before, because a reporting network that does not exist gives the ministry a practical reason to move [11]. If the tax service's notice does not appear before year-end, that readiness argument gets its opening [13].
What to watch
- Whether the Strategy and Finance Committee takes up any of the three opposition bills or lets this referral lapse as it did in May.
- Whether Lee Hyoung-il clears Tuesday's confirmation hearing and keeps the ministry behind the January 2027 date.
- Whether DAXA and the tax service settle an exchange reporting network in time for trades from January 1, 2027.