South Korea’s Ruling Party Moves Toward Another Crypto Tax Delay, Says Digital Asset Law Must Come First

Kim Min-seok Says Party Will Gather Public Opinion Before Reaching a Conclusion

South Korea’s planned tax on virtual-asset income, due to take effect in January, is effectively heading toward another delay. Pressure is building for a fourth postponement as information-sharing with the US, a core part of the tax infrastructure, will not be available until 2029, making only partial enforcement possible. The ruling camp is also slowing the process amid strong resistance from younger voters and stagnant approval ratings.

Rep. Oh Gi-hyung of the Democratic Party, the ruling party’s secretary on the National Assembly’s tax and economic planning committee, told reporters after a party-government meeting on October 28 that while there was agreement on the principle of taxation, improvements were still needed to ensure domestic tax fairness and overhaul the system. Authorities can identify current holdings, he said, but face limits in tracking transfers, lending transactions and data from overseas exchanges, constraining simulations. The party and government also agreed that a broader “Digital Asset Framework Act” governing the overall virtual-asset ecosystem should be enacted first. Oh added that the law should also serve as the basis for dealing with any future crypto derivative products and remained an area requiring further review.

Party leader Kim Min-seok said at a Supreme Council meeting at the National Assembly that many participants favored first revising and supplementing the system and then postponing taxation for a certain period. He said the party would reach a reasonable conclusion after gathering public opinion and holding final consultations with the government.

Questions are also being raised about the implementation timeline, as officials did not give a firm answer on the schedule for related administrative notices that the government had said it would prepare by the end of October. Some within the ruling camp see the hesitation over implementing the crypto-income tax as an effort to avoid alienating younger voters, who are especially sensitive to asset policy, at a time when the administration is seeking a rebound in approval ratings. Under current rules, a 22% tax rate would apply to annual income after a basic deduction of 2.5 million won.

Choi Hyeong-chang, Hankyung.com reporter calling@hankyung.com