South Korean Lawmakers Propose Bill to Abolish Cryptocurrency Income Tax Plan Set to Take Effect in 2027

Odaily News According to a report by South Korean news media Digital Asset, the right-wing People Power Party proposed a bill on Thursday aimed at amending the income tax law to completely cancel the plan to tax cryptocurrency profits. The bill was introduced by the party's floor leader, Song Yeong-suk.

South Korea currently plans to impose a tax of up to 22% on cryptocurrency trading profits exceeding 2.5 million won (approximately $1,665), which includes a 20% national income tax and a 2% local tax. Due to strong opposition from the industry and investors, South Korea has postponed the implementation of this tax regulation three times, with the original target date of 2022 being pushed back.

The National Tax Service of South Korea recently announced that they are developing an artificial intelligence-based system to track and analyze cryptocurrency transactions, which is scheduled to be launched on January 1, 2027.

The primary rationale for the latest bill to abolish the cryptocurrency tax is to ensure fairness and equity in taxation across various types of investments. South Korea abolished a broader income tax on other financial investments such as stocks at the end of 2024. Critics argue that it is unfair to impose an income tax solely on cryptocurrency investors. (The Block)