Investor backlash is intensifying as the Korean government moves ahead with plans to implement cryptocurrency taxation in January as scheduled. A petition calling for the abolition of the tax has drawn nearly 10,000 signatures on the National Assembly's e-petition platform within a day of its posting.
According to financial industry sources on Monday, a "Petition for the Abolition of Virtual Asset Taxation" was posted on the National Assembly's public petition board the previous day. As of 1:30 p.m. the same day, the petition had gathered approximately 9,700 signatures and was spreading rapidly. Under the public petition system, a petition is referred to the relevant standing committee of the National Assembly if it receives at least 50,000 signatures within 30 days of posting.
The petitioner demanded the abolition of cryptocurrency taxation, arguing that "while the financial investment income tax is being scrapped and tax relief is being granted for stocks, pushing ahead with separate taxation only on cryptocurrencies is inequitable." The petitioner further argued that "the cryptocurrency market has high volatility and high risk of losses, yet institutional safeguards such as loss carryover deductions are lacking," adding that "pushing ahead with taxation first could increase the burden on investors."
Under the current Income Tax Act, income from the transfer and lending of cryptocurrencies will be classified as other income and taxed starting in January 2027. A 20 percent tax rate will apply to annual gains exceeding 2.5 million won, with the effective tax rate reaching about 22 percent when local taxes are included. Cryptocurrency taxation was introduced through a 2020 revision of the Income Tax Act but has been postponed three times due to insufficient taxation infrastructure and inadequate investor protection frameworks, pushing implementation to January 2027.
With the tax implementation date approaching next year, the Ministry of Economy and Finance, the tax authority, recently reaffirmed its position that cryptocurrency taxation will no longer be deferred. The rationale is tax equity with wage and business income taxpayers. The National Tax Service has also begun building an "Integrated Virtual Asset Analysis System" to accurately track transaction flows by individual taxpayer, with a target launch date of this December.
