Why it matters. South Korea is one of the world's most active retail crypto markets, so how Seoul resolves this fairness fight will influence global debates on how to tax digital assets without driving traders offshore. The dispute also shows how quickly investor politics can override stated tax principles in major Asian economies.
Background. Korea has an unusually large base of small-scale retail investors who are politically vocal, especially around elections — both major parties have repeatedly softened capital-gains rules to court them. The Moon Jae-in (liberal) and Yoon Suk-yeol (conservative) administrations have alternated power since 2017, but both have ended up delaying the crypto tax. The June 3 local elections referenced in the story are mid-term regional votes that often serve as a referendum on the sitting president.
What to watch next. Watch whether the National Assembly's finance committee uses the citizen petition as cover for a fourth delay — or links any postponement to reviving the scrapped stock tax.
A Tax Set to Hit Crypto — But Not Stocks
South Korea is once again debating whether to tax cryptocurrency gains, with a new levy scheduled to take effect in January 2027. Under the plan, annual crypto profits above 2.5 million won (roughly US$1,800) would be taxed at 22%. But investors and lawmakers are pushing back hard, arguing the policy is unfair because a parallel tax on stock and fund profits — known as the Financial Investment Income Tax, or FIIT — was scrapped at the end of 2024.
The result is a striking imbalance: most retail stock investors in Korea now pay no capital gains tax at all, while crypto traders are being told to brace for one of the country’s stricter digital-asset levies. Critics say that gap undermines the basic principle that “where there is income, there is tax.”
A Petition Heads to the National Assembly
Opposition is moving from social media into formal politics. A citizen petition demanding the repeal of the crypto tax, filed on May 13, has gathered more than 54,000 signatures on the National Assembly’s official public petition portal. Once a petition clears the 50,000-signature threshold within 30 days, it is referred to the relevant standing committee — in this case, the Strategy and Finance Committee — for review.
The petitioner argues that the government should not push ahead with enforcement but instead reopen the entire debate, including the option of abolishing the tax outright.
Three Delays, and Possibly a Fourth
Korea’s crypto tax has had a turbulent history. It was first formalized in 2020 under the Moon Jae-in administration, which framed it as a matter of fairness with wage and business income. The National Assembly passed the enabling law that year, with a planned start date of January 2022. Since then, the launch has been postponed three times:
- 2021: Delayed to 2023 ahead of the presidential election.
- 2022: Pushed to 2025 under the Yoon Suk-yeol government, citing the need for stronger investor protections.
- 2024: Postponed again to 2027 amid heavy lobbying from retail investors.
Tax experts now warn that a fourth delay is plausible if crypto markets weaken further.
The Stock Tax That Wasn’t
The political backdrop is crucial. The FIIT would have imposed up to a 27.5% tax on profits from stocks, funds and other financial instruments. But at the end of 2024, ruling and opposition lawmakers agreed to scrap it entirely. As a result, capital gains tax on Korean stocks now applies only to so-called “large shareholders” — those holding at least 5 billion won (about US$3.6 million) in a single stock.
That decision lit the fuse on the current fairness argument. In March, the conservative People Power Party introduced a bill to abolish the crypto tax outright, calling it inconsistent with the broader tax system. The liberal Democratic Party has signaled it will not seriously engage until after the June 3 local elections.
Calls to Bring Back the Stock Tax
Labor unions and civic groups including Citizens’ Coalition for Economic Justice (CCEJ) and the People’s Solidarity for Participatory Democracy (PSPD) are pushing in the opposite direction. At a press conference on May 14, they urged the government to “normalize financial taxation” and revive the FIIT, arguing that with the benchmark KOSPI index now approaching 8,000 points, conditions for taxing market gains have rarely been better.
The Ministry of Economy and Finance, however, says it has “nothing under review” regarding the FIIT, even as it insists the crypto tax will start on schedule.
Oh Moon-seong, head of the Korea Tax Policy Association and a professor at Hanyang Women’s University, summed up the dilemma: taxing crypto while leaving stock gains untouched, he warned, will provoke “severe taxpayer resistance” — yet the government has effectively dropped the stock-tax debate for fear of spooking the market.
Based on Korean-language reporting. Source: ‘금투세 폐지’에 발목 잡힌 코인 과세…“형평성 차원서 함께 논의해야” (한겨레). Summarized and rewritten for international readers.
