The presidential office is reviewing another postponement ahead of discussions with the ruling Democratic Party (DP), with the tax currently scheduled to take effect on Jan. 1, 2027.
Under existing law, annual income from the transfer or lending of virtual assets would be taxed after a basic deduction of 2.5 million won ($1,890), at an effective rate of 22 percent including local income tax.
The levy was introduced through a 2020 amendment to the Income Tax Act but has never taken effect, with its launch postponed from 2022 to 2023, then to 2025 and again to 2027.
The latest delay was approved by the legislative in December 2024 alongside the abolition of a separate financial investment income tax covering stocks, bonds, funds and derivatives.
The renewed debate centers partly on whether tax authorities can apply the levy evenly to transactions conducted through domestic and overseas platforms.
Korea is committed to begin exchanging virtual asset transaction information in 2027 under the Organisation for Economic Co-operation and Development's Crypto-Asset Reporting Framework (CARF), while the United States, home to several major global crypto platforms, is scheduled to begin exchanges in 2029.
Domestic exchange operators have reasoned for more time to establish standardized systems for automatically transmitting tax-related transaction data.
DP lawmaker Park Min-gyu and 13 other lawmakers from the broader ruling bloc have proposed pushing implementation to 2029, while the opposition People Power Party (PPP) has also supported another delay on the grounds that tax infrastructure remains incomplete.
DP leader Kim Min-seok said last week that the issue should be settled within the year through consultations with the government.
The debate has gained political weight as the ruling camp faces weaker public support and heightened sensitivity over economically active and investment-oriented voters.
A Realmeter survey released Monday showed the PPP at 42.6 percent and the DP at 36.0 percent, while President Lee Jae Myung's approval rating stood at 35.3 percent. Realmeter cited several factors behind the weakness, including the recent stock-market slump and controversy over pension fund stock sales, alongside housing and broader political issues.
In 2025, the government proposed lowering the shareholding threshold for capital gains taxation from 5 billion won to 1 billion won per stock, only to retain the higher threshold after opposition from individual investors and ruling-party lawmakers.
The episode underscored the political sensitivity of investment taxation as the government seeks to encourage households to shift savings from property toward financial assets.
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