South Korea Moves to Repeal Planned 22% Crypto Gains Tax

TLDR

• South Korean legislators have introduced a bill to repeal the proposed 22% cryptocurrency gains tax before its scheduled 2027 start date.
• The proposal aims to eliminate all digital asset taxation provisions from the Income Tax Act.
• The existing framework would impose a 20% national tax and a 2% local tax on annual gains exceeding 2.5 million won.
• Authorities have delayed the crypto tax three times, with implementation now set for January 1, 2027.
• Lawmakers have argued that taxing cryptocurrencies separately results in unequal treatment compared to other financial investments.

(SeaPRwire) –   South Korean legislators have moved to abolish a planned 22% cryptocurrency gains tax ahead of its 2027 start date. The People Power Party submitted a bill on March 19, 2026, to remove all related clauses. The proposal targets provisions in the Income Tax Act that would tax annual digital asset gains above 2.5 million won.

South Korea Tax Repeal Bill Targets 22% Crypto Framework

Rep. Song Eon-seok, serving as the floor leader of the People Power Party, introduced the amendment. He proposed deleting every article linked to digital asset taxation from the Income Tax Act. The current law establishes a 20% national tax plus a 2% local tax on gains above 2.5 million won (approximately $1,700 to $1,900). The tax was set to begin on January 1, 2027, following three prior delays.

Lawmakers contended that the structure creates unequal treatment across asset classes. They noted that authorities scrapped broader financial investment taxes in 2024 to support capital markets. However, the crypto tax was retained, which critics deem inconsistent. The bill states that taxing digital assets alone places holders at a disadvantage.

Supporters of the repeal highlighted conflicts in asset classification. Domestic authorities treat virtual assets as commodities, yet the tax mirrors securities regulations. Some lawmakers warned that applying income tax and value-added tax could lead to double taxation. They stated that this framework raises legal and administrative questions.

The proposal also addressed enforcement and cost tracking. Lawmakers noted that calculating acquisition prices across exchanges would strain compliance systems. They added that foreign participants face additional complexity. Critics argued that enforcement could become inefficient if records remain fragmented.

Enforcement Plans Continue Despite Legislative Push

The National Tax Service has continued preparations to monitor cryptocurrency transactions. Reports indicated the agency is developing a 3 billion won AI-driven system. Officials plan a pilot launch in November 2026, with full deployment by year-end. The system aims to track transfers, detect evasion, and calculate taxable gains.

The ruling Democratic Party has confirmed it will review the repeal bill. However, party leaders have not announced unified support. The measure now depends on cross-party agreement in the National Assembly. As of March 2026, cryptocurrency gains remain untaxed in South Korea, pending further legislative action.