South Korea Postpones Crypto Tax Implementation to 2027

South Korea's Democratic Party (KDP) has shifted its stance on the proposed crypto capital gains tax, now agreeing to delay its implementation for another two years, pushing the tax start date to 2027.

Initially set to go into effect in January 2025, the tax, which would impose a 20% levy on digital asset profits, will be postponed after KDP floor leader Park Chan-dae announced the decision during a press conference on December 1.

This marks a significant change from the party’s earlier opposition to the delay. Initially, the KDP had firmly disagreed with the ruling People’s Power Party (PPP), which had suggested a grace period for the tax’s introduction. The PPP had proposed a three-year deferral, citing concerns that rapid taxation could drive investors away from the market.

Initially, the KDP had championed the idea of a 2025 start date, even pushing to increase the tax threshold significantly—from $1,800 to $36,000—so only major crypto investors would be affected.

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The tax proposal was originally planned for 2021 but was postponed twice due to heavy resistance from crypto industry stakeholders, and fears that the new tax would hurt investor confidence. Despite earlier backtracking, the delay marks a major shift in the ongoing debate over how to regulate and tax the digital asset market in South Korea.

Alexander Zdravkov