South Korea Democratic Party proposes delay for crypto taxation

The Democratic Party of Korea has formally proposed a delay to the implementation of cryptocurrency income taxation, which is currently scheduled to begin on January 1, 2025. Party leader Kim Min-seok stated that the proposal follows consultations with the National Assembly's Strategy and Finance Committee and meetings with virtual asset service providers.

The party aims to prioritize the enactment of a Digital Asset Basic Act to establish a comprehensive legal framework before taxation begins. This approach is intended to provide companies and investors with an adequate adjustment period. Lawmakers noted that current infrastructure, such as the ability to verify overseas transaction data and implement automated information exchange systems like CARF, requires further development to ensure tax equity.

If the proposal is accepted, it would mark the fourth delay for the tax, which imposes a 22% rate on annual gains exceeding 2.5 million won. Discussions among lawmakers suggest a potential two-year postponement, which would push the implementation date to 2029. The Korea Digital Asset Service Providers Association (KDA) has also called for a conditional two-year delay tied to a specific legislative and infrastructure roadmap.