South Korea's Democratic Party Defers Digital Asset Tax Decision by Up to Two Weeks

South Korea's Democratic Party ended a Friday meeting with digital asset business operators without deciding whether to postpone the digital asset tax scheduled to take effect in January 2027, saying it will settle its position within one to two weeks. The gathering at the National Assembly members' office building in Yeouido, Seoul, was the second inconclusive session this week: a party-government council on Thursday also closed without a verdict.

Rep. Oh Ki-hyung, secretary of the Assembly's Tax and Economy Policy Committee, told reporters after the session that it existed to collect the industry's views, not to close the debate. “The law already exists,” he said. “If we defer, we have to judge what kind of deferral is appropriate, and under what conditions.” He set the procedural limit: the committee's tax subcommittee convenes in late November, so a decision cannot slip further, and any deferral bill would have to be processed by the end of that month.

The industry asked for another postponement, arguing the market is still in an early stage. Oh noted the domestic market is built around individual investors, with corporate and foreign participation restricted, and said the investor base and product range differ from overseas markets such as the United States. Attendees included executives of Korea's major exchange operators, among them Dunamu, Gopax, Bithumb and Coinone, along with DAXA standing vice chairman Kim Jae-jin, who urged careful design of the tax framework, noting the debate has run since 2020.

Jo Seung-rae, chairman of the Assembly's Finance and Economy Committee, said he had told the government days earlier that the public notice laying out the tax's details should wait until the deferral question is settled, and understood the government intends to do so. The administration had planned to finalize the notice draft by the end of October, according to DigitalAsset. He added the Finance Ministry is working with financial regulators on a comprehensive market growth plan, arguing tax terms stand firmer once that groundwork exists. Policy committee chairman Kwon Chil-seung said leaving the uncertainty in place would cost both the market and investors, citing unfinished rules for trades with overseas exchanges, loss carryforward deductions and the case for a Digital Asset Basic Act.

People Power Party Presses for Delay

The opposition is pushing in the same direction from the other side. The People Power Party, which met the heads of the country's five major exchanges in March and pledged to pursue abolition of the tax, has pressed the ruling camp for another deferral on grounds that preparation is incomplete. Five-term Rep. Yoon Sang-hyun convened a digital asset tax policy forum at the National Assembly on Friday with Lee Tae-ho, a visiting professor at Yonsei University's Graduate School of International Studies, Moon Kyung-ho, who heads the income tax division at the Finance and Economy Ministry, and young investors. Yoon argued the levy has already been postponed three times because the framework on investor protection and tax fairness remains unfinished, and asked how domestic investors would accept a regime that leaves local trades transparently recorded on every exchange's order book while offshore activity, reachable through any of the world's best crypto exchanges, stays out of view.

Park Soo-young, a former secretary of the Finance and Economy Committee, used a recent press conference to call the design unfair, saying it abolishes the financial investment income tax while keeping an income tax on digital assets, and that the government still lacks confirmed tax bases or revenue estimates after its own audit. Floor leader Jung Jung-sik told Deputy Prime Minister and Finance Minister Lee Hyoung-il at a recent meeting that the tax should not be rushed, warning a forced levy would only push capital to Hong Kong or Singapore. Independent lawmaker Han Dong-hun has repeatedly called for a deferral; in a Facebook post in September he wrote that the Democratic administration seems not to grasp the severity of the issue, noted 2027 is three months away, and warned domestic investors are likely to move into decentralized spaces beyond the tax authorities' reach during the remaining months. According to Coinreaders, the party frames its demand as a response to the ruling camp's failure to conclude.

The two camps have converged on a delay in practice but not on its ownership. The statute exists; what remains open is timing and conditions, and the binding constraint is procedural. A deferral bill must clear the National Assembly by late November to alter a January 2027 start, which is why Oh capped the party's decision at two weeks. The government's notice, once due by the end of October, is now the pressure point. If it slips and no bill appears, the three-month runway lawmakers on both sides describe narrows, and the capital-flight scenario both camps invoke moves from warning to baseline expectation.