South Korean Lawmakers Propose Abolishing 22% Crypto Tax

Highlights:

• A new proposed bill would repeal South Korea’s planned 22% virtual asset taxation.
• The People Power Party said crypto investors deserve equal treatment after the stock tax repeal.
• The Democratic Party responded by saying it will review the bill.

South Korea’s crypto tax debate has entered a new stage after a fresh repeal proposal. Now, the proposal targets a levy scheduled to start on January 1, 2027. If lawmakers approve the change, investors would avoid a tax burden that has sparked years of dispute. 

According to local news outlet Digital Asset, the right wing of the People Power Party introduced a bill to amend the Income Tax Act. The bill is sponsored by Song Eon-seok, who leads the People Power Party on the Assembly floor. His amendment would remove all provisions tied to digital asset income taxation.

South Korea originally aimed to launch the tax in 2022, yet officials have already delayed it three times. Those delays followed strong opposition from investors and industry groups. Under the current law, the country plans to tax crypto profits above 2.5 million won by imposing a 20% national tax and 2% in local taxes.

🇰🇷JUST IN: SOUTH KOREA OPPOSITION MOVES TO SCRAP 2027 CRYPTO TAX ENTIRELY

South Korea's opposition party has introduced a bill to fully abolish the planned 22% crypto capital gains tax scheduled for 2027.

The party argues that it creates an unfair disparity, given that stock… pic.twitter.com/BunESTNyVS

— BSCN (@BSCNews) March 19, 2026

Lawmakers Link Fairness Concerns with Broader Market Tax Policy

According to the People Power Party, the existing structure is no longer suitable in the investment tax environment. Late in 2024, South Korea repealed the tax on the financial investment income on products, including stocks. Thus, party lawmakers claim that taxing gains only on digital assets would result in an unbalanced system.

The bill also raises questions about how digital assets should be classified. According to the proposal, the U.S. SEC recently announced that it treats many digital assets as commodities rather than securities. South Korea already treats digital assets as commodities under value-added tax rules. As a result, a separate income levy could trigger concerns about double taxation.

They also warn of practical problems when officials try to calculate purchase costs for non-resident foreign investors. The enforcement may be complicated because of cross-border trades, exchange transfers, and fragmented records. Meanwhile, the National Tax Service is building an AI tool that will track and analyze crypto transactions.

Committee Talks Will Shape the Next Stage of Debate

The Democratic Party of Korea has not endorsed the repeal bill, yet it has agreed to review it. In a separate report, Kim Han-gyu, the Democratic Party’s chief deputy floor leader for policy, said the party would discuss the proposal after its introduction. He said that the matter had not seen serious internal discussion, noting that they would discuss it. He also said the issue was not coordinated with the opposition in advance.

Kim noted that the earlier party policy supported moving ahead with the existing tax plan. Still, he acknowledged calls to align the treatment of stocks and digital assets. That comment suggests lawmakers may revisit the fairness debate during committee review. For now, the bill still appears headed to the Finance and Economy Committee for further discussion.

Despite the battle regarding crypto tax, South Korea remains one of the world’s largest crypto markets, with nearly one in five South Koreans using or trading digital assets. According to Financial Services Commission data, the market reached 95.1 trillion won in June last year. 

At the same time, authorities are drafting broader rules under the Digital Asset Basic Act. In February, the financial regulator in the country said that stablecoins such as USDT and USDC could face exclusion under the corporate crypto investment rules.

According to Herald Economics, South Korea's financial regulators are inclined to exclude dollar-pegged stablecoins such as USDT and USDC from the list of permissible investments when drafting guidelines for listed companies to invest in cryptocurrencies. The regulators believe…

— Wu Blockchain (@WuBlockchain) March 7, 2026