Kim Sang-hoon Moves to Delay Korea's 22% Bitcoin (BTC) Tax to 2029

Kim Sang-hoon's Two-Year Delay Bill

A South Korean lawmaker wants the country's digital asset income tax pushed back two years. Kim Sang-hoon of the opposition People Power Party, who chairs the party's special committee on stock and digital asset value-up, delivered written remarks at the Block Festa 2026 conference at IFC The Forum in Seoul's Yeouido district on Thursday, arguing that taxation is set to begin while the institutional groundwork remains incomplete. In August he introduced an amendment to the Income Tax Act that would move the tax's start date from January 1, 2027 to January 1, 2029.

The current framework applies a combined 22% levy, 20% income tax plus local income tax, to annual digital asset income above 2.5 million won. Only gains from transfers and lending occurring after January 1, 2027 fall inside the base, and those profits are classified as other income. Profits from simply holding, the habit many traders label HODL, sit outside the base until a disposal event triggers the rule.

Kim framed the bill not as a rejection of taxation but as a sequencing argument: collect only after the state can administer the levy properly. He noted the government has yet to estimate either the expected revenue or the administrative cost of collection, a gap he read as evidence the preparation is insufficient. The tax has already been delayed three times, and he argued this round should pair the timing question with a broader overhaul of income classification, loss netting and acquisition-cost calculation. The amendment now sits against the government's position, which is to proceed with January 2027 absent new legislation, setting up a direct confrontation in the National Assembly review. Bitcoin (BTC) price dynamics in Korean trading hours have historically tracked these policy milestones, giving the timing dispute relevance beyond domestic tax filings.

168.9 Trillion Won Left Korean Exchanges

Kim's second argument concerns the enforcement base. Last year, 168.9 trillion won of virtual assets moved from domestic Korean exchanges to overseas exchanges and personal wallets, a figure he cited to show how difficult it is to track taxable flows once assets leave licensed venues. Decentralized trading compounds the problem: on venues built around DeFi protocols and DAO-governed platforms, gains and losses are often hard to verify, and the current rules recognize no loss carryforward, a gap he called an equity defect in the tax design.

The classification mechanics matter for how the levy lands. Digital asset transfer and lending income is treated as other income, netted across the year, with the 2.5 million won deduction applied to the remainder before the 22% combined rate. Acquisition-cost calculation, a persistent dispute in crypto taxation, remains one of the items Kim wants rewritten alongside the delay. His broader pitch ties taxation to industrial policy. A tokenized securities bill passed the National Assembly plenary in January and takes effect in February 2027, and the Financial Services Commission has already published its policy direction, yet the second phase of digital asset legislation is still unfinished. Kim said securities firms and banks are preparing actual issuance and distribution while the legal scaffolding is not done. Real-world-linked assets, stablecoins and on-chain businesses, in his words, all require law and tax policy to move together. He closed by promising, as committee chairman, to push industry feedback into legislation and policy. The government, for its part, has not publicly aligned its tax timetable with the phase-2 legislative calendar, leaving the two tracks on different schedules.

Delay Bill Meets Phase-2 Legislation

COINOTAG's reading: the decisive question is not the two-year delay itself but whether the Assembly pairs it with the definitional fixes Kim names. Three prior postponements suggest delay carries legislative momentum; the amendment's proposed start of January 1, 2029 binds Korean resident individuals realizing transfer and lending gains, while the existing 22% rate and 2.5 million won deduction stay untouched in the bill text. For Bitcoin (BTC), Korea matters as a retail-heavy market and as a jurisdiction whose phase-2 framework, covering stablecoins and real-world assets, matures alongside the tokenized securities law in February 2027. Watch whether revenue and collection-cost estimates appear before the Assembly's review concludes.