South Korea’s 22% crypto tax is under review after a public petition to repeal it passed 50,000 signatures on the National Assembly’s website. Lawmakers now have to reconsider the tax, which is scheduled to start in 2027 after several delays.
The author of the petition argues the tax “imposes financial and reporting burdens on investors.” They demand a thorough change, not just another brief extension.
The move, they warn, could limit prospects for young people. Many young people see crypto as one of the few ways to generate wealth. They face high housing costs and limited salary growth in South Korea.
Critics argue that the government scrapped or eased some taxes on stock and bond gains, but not on crypto gains. They say the move treats digital assets differently from other investments.
They also warn that a large tax on local platforms would push traders to offshore exchanges and decentralized protocols. In those markets, regulators would struggle to track activity, and local investors would have less protection.
What the 22% Crypto Tax Would Do
After years of delay and debate, the Finance Ministry says the 22% tax on crypto earnings will take effect on January 1, 2027. Tax authorities will classify profits from transferring or lending virtual assets as “other income” and tax earnings above 2.5 million won, or roughly 1,800 dollars.
Officials set the 22% rate by combining a 20% national income tax with a 2% local surcharge, and they estimate the tax will cover about 13.26 million investors. Finance Ministry official Moon Seung-wook says the National Tax Service is “finalizing guidance” and has met several times with major exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, to draft a notice for legislative review in 2026.
The petition has also sparked debate inside political parties. Some lawmakers are proposing alternative thresholds or phased rates for smaller investors.
Legal experts note that any amendment must pass the Assembly’s finance committee before a full vote. They say this process could take months and might collide with broader tax reform talks.
Supporters of the tax counter that it aims to bring crypto in line with other taxable income and improve fairness between different types of investors. They say a clear tax framework could reduce speculation, increase transparency, and help integrate digital assets into South Korea’s broader financial system without banning or sidelining the sector.
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