A national petition calling for the abolition of South Korea's planned cryptocurrency tax has surpassed 40,000 signatures within a week of going public, as the government prepares to implement the levy from January next year.
According to the National Assembly's electronic petition system on Thursday, the "Petition on the Abolition of Virtual Asset Taxation," registered on the 13th, had drawn 45,052 signatures as of 1:47 p.m. The petition is open for endorsement until the 12th of next month. If it surpasses 50,000 signatures, it will be reviewed by the relevant standing committee of the National Assembly.
Under the current Income Tax Act, income generated from transferring or lending virtual assets will be classified as other income and taxed starting January 1 next year. A combined tax rate of 22 percent — comprising a 20 percent other income tax and a 2 percent local income tax — will apply to virtual asset income exceeding 2.5 million won.
The number of crypto investors in Korea is substantial. As of December last year, cumulative membership at Upbit alone reached 13.26 million. Once the tax takes effect, the first reporting and payment will be made during the comprehensive income tax filing in May 2028.
The petitioner cited issues of fairness with the stock market, prolonged market downturns, and inadequate investor protection mechanisms as grounds for abolishing the crypto tax.
"Hasty taxation without sufficient institutional foundations, investor protection measures, international fairness, and market realities is likely to result only in burdens on citizens and contraction of the industry," the petitioner argued. "It is now time for a full-scale reconsideration that includes abolition, rather than pushing ahead with virtual asset taxation."
The government, however, is leaning toward implementing the crypto tax as scheduled. The Ministry of Economy and Finance has reportedly decided not to include a tax deferral plan in the tax law revision bill set to be announced in July.
Within the ruling party, support is also growing for proceeding with the tax in January as planned, given that the implementation has already been postponed multiple times. Rep. Jung Tae-ho of the Democratic Party of Korea, the ruling party's secretary on the Strategy and Finance Committee, said, "Since this matter has already been delayed, I naturally think it should be implemented." He added, "Once the tax reform bill is submitted to the committee, discussions at the party level will begin."
Behind the growing investor backlash lies the perception that Korea's tax framework lacks sufficient buffers compared with those of major overseas economies. Leading countries have built in mechanisms to adjust tax burdens based on holding periods or loss treatment to prevent market contraction and encourage long-term investment.
In the United States, long-term capital gains tax rates of 0 to 20 percent apply to virtual assets held for more than one year, depending on income levels. Germany grants tax exemptions for crypto held for more than one year after purchase. Japan, which previously experienced capital outflows due to a top progressive tax rate of 55 percent, is currently pursuing tax reforms that incorporate virtual assets into the financial product framework, centered on a flat 20.315 percent separate taxation rate and the allowance of loss carryforward deductions.
