TLDR
- South Korean lawmakers introduced a bill to repeal the planned 22% crypto gains tax before its 2027 start date.
- The proposal seeks to remove all digital asset taxation provisions from the Income Tax Act.
- The current framework would impose a 20% national tax and a 2% local tax on annual gains above 2.5 million won.
- Authorities have delayed the crypto tax three times, with implementation now scheduled for January 1, 2027.
- Lawmakers argued that taxing crypto separately creates unequal treatment compared to other financial investments.
South Korean lawmakers have moved to scrap a planned 22% crypto gains tax before its 2027 start date. The People Power Party submitted a bill on March 19, 2026, to remove all related clauses. The proposal targets provisions in the Income Tax Act that would tax annual digital asset gains above 2.5 million won.
South Korea Tax Repeal Bill Targets 22% Crypto Framework
Rep. Song Eon-seok introduced the amendment as floor leader of the People Power Party. He proposed deleting every article tied to digital asset taxation from the Income Tax Act. The current law sets a 20% national tax plus a 2% local tax on gains above 2.5 million won, about $1,700 to $1,900. The tax would start on Jan. 1, 2027, after three prior delays.
Lawmakers argued that the structure creates unequal treatment across asset classes. They said authorities scrapped broader financial investment taxes in 2024 to support capital markets. However, they kept the crypto tax, which critics call inconsistent. The bill states that taxing digital assets alone places holders at a disadvantage.
Supporters of the repeal pointed to asset classification conflicts. Domestic authorities treat virtual assets as commodities, yet the tax mirrors securities rules. Some lawmakers warned that applying income tax and value-added tax could amount to double taxation. They said this framework raises legal and administrative questions.
The proposal also addressed enforcement and cost tracking. Lawmakers said calculating acquisition prices across exchanges would strain compliance systems. They added that foreign participants face added complexity. Critics argued that enforcement could become inefficient if records remain fragmented.
Enforcement Plans Continue Despite Legislative Push
The National Tax Service has continued preparations for monitoring crypto transactions. Reports said the agency is building a 3 billion won AI-driven system. Officials plan a pilot launch in November 2026, with full deployment by year-end. The system aims to track transfers, detect evasion, and calculate taxable gains.
The ruling Democratic Party has confirmed it will review the repeal bill. However, party leaders have not announced unified support. The measure now depends on cross-party agreement in the National Assembly. As of March 2026, crypto gains remain untaxed in South Korea, pending further legislative action.
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