Petition for Two-Year Delay in Cryptocurrency Taxation Gains Support

As the implementation of taxation on virtual asset income approaches, investor backlash is growing. Critics argue that while capital gains from domestic stocks remain tax-exempt, imposing taxes solely on virtual assets is inequitable.

According to the National Assembly's petition website, a petition requesting a two-year delay in cryptocurrency taxation has received over 17,000 signatures.

Investors are raising concerns about the disparity in tax treatment between domestic stocks and virtual assets. With the abolition of the financial investment income tax, general investors, excluding major shareholders, are not subject to capital gains tax on domestic stock transactions. In contrast, starting next year, cryptocurrency investors will face a 22% tax rate on annual capital gains exceeding a basic deduction of 2.5 million won, including local income tax.

Many investors find it unreasonable to classify only virtual assets as a separate taxable category. According to the Financial Supervisory Service, as of the end of last year, there were 11.13 million individual cryptocurrency investors in South Korea, with those in their 20s and 30s making up 45.8% of that number. They argue that imposing a separate tax could hinder asset accumulation opportunities for younger investors.

The timing of the tax implementation coincides with political events, adding to the controversy. If taxation begins next year, investors will be required to report and pay taxes on cryptocurrency income earned in 2027 by May 2028. Notably, the 22nd National Assembly elections are scheduled for April 2028, meaning the first cryptocurrency tax will take effect shortly after the general elections.

Petitioners are highlighting this timeline, suggesting that backlash from younger voters could create political pressure. They warn that the issue of cryptocurrency taxation may evolve from a simple tax matter into a broader policy issue related to asset formation for the youth.

Within the cryptocurrency industry, there are calls to consider the coherence of the tax system and its acceptability to investors rather than opposing taxation outright. An industry representative stated, “It is important to establish criteria that investors can accept rather than simply opposing taxation. We should also consider reviewing the establishment of a legal framework for the industry and investor protection through legislation like the Digital Asset Basic Act before refining the tax system.”