Lee Hyeong-il Reaffirms January 2027 Bitcoin (BTC) Tax Start in Korea

50,000 Signatures on Tax Deferral Petition

South Korea's digital asset tax will take effect on schedule in January 2027, according to the country's finance minister nominee, even as a public petition seeking a two-year delay crossed the 50,000-signature threshold on the National Assembly's electronic petition platform. The petition, titled Petition for a Two-Year Deferral of Crypto Taxation — a title the drafting committee rendered around the phrase 'strategic asset taxation timeline' — was published on August 21 and argues that the start date should be pushed back so the domestic digital asset industry and its tax infrastructure can be put in order first. It now satisfies the requirement for referral to the responsible standing committee. The deferral drive follows an earlier petition filed in May demanding the tax be scrapped outright; that one gathered more than 50,000 signatures within eight days and was referred to the Strategy and Finance Committee, where it remains pending without substantive review.

Lee Hyeong-il, the nominee for Deputy Prime Minister and Minister of Economy and Finance, restated the implementation schedule in written answers submitted ahead of his September 15 confirmation hearing. Applying the principle that income should be taxed wherever it arises, he wrote, makes it desirable to enforce the digital asset tax from next year. Detailed assessment standards will be announced through a National Tax Service notice within this year, and his office will prepare so that filers face no difficulty reporting. Lee also defended the current framework, which classifies digital asset transfer and rental income as other income subject to a basic deduction and a single flat rate, arguing the design keeps taxpayer compliance costs low. Because equities already carry transfer-income tax on large shareholders, overseas holdings and unlisted shares, plus a securities transaction tax, he said taxing digital assets improves fairness across asset classes. Capital gains taxation more broadly — including the financial investment income tax — should be revisited only after market conditions stabilize, he added, drawing a contrast between the tax principle he invoked for digital assets and the market-stability condition he attached to broader financial taxation.

DAXA Flags Cost-Basis Verification Gaps

The industry's objection is not to taxation in principle but to readiness roughly three months before the statutory start date. DAXA, the council of South Korea's major digital asset exchanges, said in a recent position paper that infrastructure for calculating and verifying acquisition costs, a withholding system for non-residents, information exchange with overseas operators and taxation standards by transaction type all remain inadequate. Core classification questions are still open: whether and how income from staking, lending, airdrops and hard forks — including yields generated through liquidity pool arrangements — should be categorized, classified and valued for tax purposes. Assets that have passed through foreign exchanges or self-custody HD wallet storage pose a separate verification problem, since domestic platforms cannot independently confirm when or at what price those holdings were acquired, and no standardized verification network or information-sharing framework exists to check the documents users submit. Loss treatment is equally unsettled: gains and losses within the same tax year can be netted, but losses exceeding gains cannot be carried forward to the following year. The National Tax Service has completed related research, yet its findings have not been reflected in any statute or notice. Kwon Seung-geun, a senior researcher at the Yeouido Research Institute, wrote in a recent report that a market now approaching the scale of institutional asset markets warrants corresponding regulation and taxation — but forcing the levy without market guidelines and a working classification system would cause inevitable confusion, pushing trading volume and capital toward offshore exchanges and decentralized venues, from long-standing protocols like Uniswap (UNI) to newer decentralized finance platforms where Korean tax rules do not reach. He tied stablecoin swaps, tax-item classification for security tokens and loss carryforwards to the same missing taxonomy. A basic law governing digital asset issuance, circulation and operator conduct is still at the National Assembly discussion stage. Readers tracking the market in real time can follow live spot and futures prices on MEXC.

Year-End Tax Notice in Focus

COINOTAG's reading of the underlying statute sharpens the stakes: the Korean Income Tax Act already fixes the effective date, taxing gains from digital asset transfers and rentals arising on or after January 1, 2027 as other income, with a 20% national income tax applied after a KRW 2.5 million annual deduction — 22% including local income tax. This is enacted law, not a pending proposal, so any deferral requires new legislation Parliament has not passed. Two variables now decide the outcome: whether the National Tax Service issues detailed criteria by year-end, and whether any deferral bill advances in committee.