South Korean investors collected 50,000 signatures on a petition to postpone the tax on cryptocurrency income, which automatically triggers review by the National Assembly. However, the government confirmed that the tax will take effect January 1, 2027 without changes.

Tax parameters

  • base rate of 20% plus 2% local levy;
  • tax-exempt threshold of 2.5 million won (approximately $1,856) of annual income;
  • taxed income from the sale, transfer, and lending of digital assets.

Fourth postponement attempt

The regulation was introduced in 2022 and has been postponed three times — each time amid objections from investors and market participants citing lack of tax infrastructure readiness.

The petition mechanism works as follows: a document that collects 50,000 verified signatures within 30 days is automatically forwarded to the relevant parliamentary committee.

Petitioners' arguments

The anonymous petition initiator stated that:

  • most investors are currently at a loss;
  • operating profits of major Korean crypto companies have dropped by up to 90%;
  • the industry as a whole is unprofitable;
  • the tax will push investors to foreign platforms;
  • with high volatility, collections will bring little to the budget.

A separate petition filed in May demanded a complete tax repeal. It gathered the required number of signatures in just eight days, was forwarded to the committee, but did not advance further.

Government position

Candidate for minister of economy and finance Lee Hyun Il stated that the tax is being introduced on schedule, and the National Tax Service will publish detailed standards by year-end.

The forwarding of the petition to the committee apparently will not change the timeline: regulators show no signs of willingness to grant a fourth postponement.

Contrast with Uzbekistan

The Korean case clearly demonstrates how different jurisdictions' approaches can be.

In Uzbekistan, cryptocurrency operations for individuals and entities are exempt from taxation — the benefit is valid until 2029. At the same time, activities are conducted through licensed providers, ensuring control without fiscal burden on participants.

The concern of Korean investors about moving to foreign platforms is a universal problem in regulating digital assets: with high capital mobility, strict conditions in one country redirect operations to others.

Those working with cryptocurrencies should consider their jurisdiction's tax regime alongside market performance of assets.

This material is for information purposes and is not tax advice.