South Korea's Democratic Party has made the deferral of digital asset income taxation its official party position and formally presented the request to the government on Wednesday. Party leader Kim Min-seok announced the move at the Supreme Council meeting held at the National Assembly in Yeongdeungpo, Seoul.

Background: A levy postponed three times

The request targets a tax currently scheduled to take effect on January 1, 2027. Under the framework, capital gains from digital assets are classified as other income and taxed at a rate of 20% on annual gains exceeding a basic deduction of 20 million won, roughly US$14,000. The levy was enacted in December 2020 with an original effective date of January 1, 2022, and has since been postponed three times: to January 2023, then to January 2025, and most recently to January 2027 through a tax law revision passed by the National Assembly in December 2024. In the more than five years since its enactment, the levy has never come into force.

Successive delays have reflected continued disagreement among policymakers over the readiness of investor-protection measures, the maturity of the domestic market, and the potential burden on local blockchain and cryptocurrency businesses. With the January 2027 implementation date roughly two months away, the Democratic Party, South Korea's largest political party, has now placed another postponement on the legislative agenda through its formal request to the government.

Because the current start date was set through the National Assembly's December 2024 tax law revision, moving it again would depend on further legislative action. For digital asset investors and businesses in South Korea, the immediate markers are the government's response to the formal request and whether any follow-up revision to the tax law is introduced in the National Assembly before January 1, 2027.

This article was first published by COINOTAG: South Korea's Democratic Party Proposes Deferral of Digital Asset Tax Due January 2027