South Korea's Democratic Party Proposes Deferral of Digital Asset Tax Due January 2027

Supreme Council Sets the Party Line

South Korea's Democratic Party made the deferral of digital asset income taxation its official party position and formally presented the request to the government on Wednesday. Party leader Kim Min-seok announced the move at the Supreme Council meeting held at the National Assembly in Yeongdeungpo, Seoul, stating: “The Democratic Party formally proposes the deferral of digital asset income taxation to the government.” The levy applies to income from digital asset activity, including gains realized through spot disposals and contract trading, and is scheduled to take effect in January 2027. Kim said the decision was reached after deliberation centered on the National Assembly's Strategy and Finance Committee, combined with party-government consultations and roundtables with domestic virtual asset business operators. He framed the proposal as the result of weighing taxation principles, the condition of the domestic industry and fairness among users, concluding that a framework law should come first so companies and investors receive a period to adapt. Kim also acknowledged that taxation has been postponed three times before, and said any new deferral must carry a clearly defined period alongside thorough preparation of prior tasks, including the use of overseas transaction information, computerized verification and taxpayer guidance. He did not specify how long the deferral should run.

Digital Asset Basic Act Comes First

The sequencing argument sits at the core of the leadership's case. Kim told the meeting the party concluded it is desirable to enact the Digital Asset Basic Act, establish the overall regulatory and tax framework through that statute, and only then begin income taxation once companies and investors have had time to adjust. In practical terms, that places legislative progress ahead of the January 2027 start date: without the basic act, the party's position is that neither service operators nor investors hold a stable set of rules to plan reporting, compliance or product decisions around. Kim pledged to accelerate the overhaul of related laws and the tax regime so that companies can invest actively in new services and users can trade without concern. The basic act has been the party's stated priority in earlier parliamentary debate, and Wednesday's proposal now ties the tax question directly to that bill's progress. No draft text of the act has been made public, and no proposed deferral length has been attached to the request, leaving both the scope of the framework and the eventual effective date open until legislation is formally tabled in the National Assembly.

Committee Backing Preceded the Announcement

The proposal followed a compressed schedule of consultations inside the party. On October 28 the Democrats convened a party-government council with the administration on digital asset taxation. Two days later, on October 30, the party held a roundtable with domestic virtual asset business operators to collect their views on postponing the levy. On November 3, Representative Oh Ki-hyung, the ruling-party secretary on the Strategy and Finance Committee, gathered the committee members' opinions and reported that consensus had formed around deferral, which he then recommended to the leadership. Kim cited that internal process when he told the Supreme Council the party had deliberated carefully before committing to the position. With the leadership now speaking formally to the government, consultation on the deferral and amendments to related tax law are expected to move into an active phase, with the Strategy and Finance Committee carrying the legislative work.

What the Open-Ended Deferral Leaves Unsettled

COINOTAG's reading: the debate has shifted from whether to defer to for how long, and that is where the uncertainty now sits. Kim explicitly declined to name a duration, and a fourth postponement after three earlier ones means the January 2027 date should be treated as suspended rather than fixed until a bill states otherwise. The binding constraint is the layer 1 of the party's plan, the Digital Asset Basic Act, since Kim's own sequencing makes taxation conditional on that statute's passage. Market participants should watch two items in the committee work ahead: the deferral length written into any amendment, and the promised preparation on overseas transaction data and automated verification, which determines how reportable income, including gains from positions built with leverage, will actually be verified.