South Korean lawmaker Park Soo-young has called for the government to withdraw its planned 22% tax on virtual asset gains before the levy takes effect on Jan. 1, 2027, arguing that the policy unfairly targets roughly 13 million crypto users while investment taxes on domestic stocks have been scrapped.
Summary
- South Korean lawmaker Park Soo-young has called for the planned 22% crypto gains tax to be withdrawn.
- The tax is scheduled to take effect on Jan. 1, 2027, with an annual deduction of 2.5 million won.
- Park said the tax could push more Korean capital to overseas crypto exchanges.
- The People Power Party has also proposed abolishing or delaying the tax.
According to Digital Asset, the People Power Party lawmaker criticized the tax plan on his YouTube channel, “Park Soo-young’s Economy TV,” on Aug. 13, describing it as a punitive policy that could push more Korean capital toward overseas cryptocurrency markets.
“I hope this punitive tax plan that holds 13 million digital asset users hostage will be withdrawn immediately,” Park said.
The lawmaker compared the treatment of crypto investors with South Korea’s decision to abolish the financial investment income tax, which would have applied to investment income from financial products including stocks.
Park argued that removing the investment tax while retaining a separate levy on virtual assets amounts to telling investors they could face a “tax bomb” if they choose not to invest in the domestic stock market.
South Korea crypto tax faces renewed opposition
Under South Korea’s current Income Tax Act, profits from the transfer or lending of virtual assets will be classified as other income from Jan. 1, 2027. Investors will receive an annual deduction of 2.5 million won, with gains above that amount taxed at 20%.
Once the 2% local income tax is included, the effective rate reaches 22%.
The 2.5 million won deduction is the same basic deduction applied to capital gains from overseas stocks, while South Korea no longer plans to introduce the financial investment income tax that would have covered certain domestic financial investments.
The government has maintained that implementation will proceed next year. In May, Moon Kyung-ho, director of the Ministry of Economy and Finance’s income tax division, publicly confirmed that authorities were preparing to introduce the tax on schedule, as crypto.news previously reported.
The National Tax Service has also been preparing implementation guidance with South Korea’s five major crypto exchanges: Upbit operator Dunamu, Bithumb, Coinone, Korbit and Gopax. The guidance is expected in 2026, while the first full filing period would come in May 2028 for income earned during 2027.
Political opposition has continued despite those preparations. The People Power Party introduced legislation in March seeking to amend the Income Tax Act and abolish the crypto tax before it takes effect. The tax has already been delayed three times following years of disagreement over when and how digital asset gains should be taxed.
Originally introduced in 2020, the regime was scheduled to take effect earlier, but lawmakers repeatedly pushed back its implementation. The latest postponement moved the start date from 2025 to 2027.
Park warns capital could move overseas
Park also challenged the idea that taxing crypto could encourage investors to redirect their money into Korean equities.
“People will not invest in domestic stocks just because of this,” he said, adding that the policy could instead accelerate the movement of Korean wealth overseas.
To support his argument, Park cited data showing that roughly 124 trillion won flowed into overseas digital asset exchanges between January and September last year.
Capital moving from Korean platforms to foreign exchanges and private wallets has already drawn regulatory attention. Financial Services Commission data released in March showed that South Korean exchanges recorded 90 trillion won, or roughly $60 billion, of crypto outflows during the second half of 2025, up 14% from 78.9 trillion won in the first half. The regulator attributed part of the activity to cross-border arbitrage and similar trading, while overseas crypto outflows have remained under scrutiny.
South Korea has also moved to place more cross-border digital asset activity within its foreign-exchange framework. Amendments to the Foreign Exchange Transactions Act created a virtual asset transfer service category and require companies handling qualifying overseas crypto transfers to register with the finance minister. The cross-border transfer rules cover businesses moving virtual assets between South Korea and foreign countries through sales, purchases or exchanges.
Loss carryforwards become another tax dispute
Park separately criticized the treatment of losses under the planned system, arguing that the government intends to collect tax when investors make profits without providing comparable treatment when cryptocurrency prices fall.
“The losses suffered from a crypto crash cannot even be carried forward, yet they are already putting a spoon into the profits,” Park said.
His comments follow other objections focused on how the virtual asset tax compares with the treatment of other investments.
A public petition seeking complete repeal of the levy crossed the 50,000-signature threshold in May, automatically sending the proposal to a National Assembly committee for review. The petition argued that imposing a 22% tax on crypto profits while financial investment income from stocks and bonds remains exempt creates unequal treatment between asset classes. The tax repeal petition also raised concerns about investor protections and the treatment of a market where large price movements can rapidly alter gains and losses.
The disagreement has left the Jan. 1 deadline dependent on whether lawmakers change the Income Tax Act before implementation. The government has said it intends to proceed under the existing law, while no clear opposition to implementation has emerged from the ruling party.
The People Power Party continues to seek either the abolition or another postponement of the tax. Its March bill proposed removing the levy entirely, while Park’s latest comments called for the government to withdraw the planned tax before its scheduled 2027 implementation.
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