South Korean independent lawmaker Han Dong-hoon has called for a two-year delay to the country’s proposed cryptocurrency tax, arguing that tax authorities currently lack sufficient overseas trading data and tools to enforce the levy fairly. Speaking out in a recent Facebook post, the former leader of the ruling People Power Party questioned whether the government should proceed with the tax while investors can easily move virtual assets from domestic platforms to foreign exchanges and untraceable private wallets, News 1 reported.
Under current legislation, South Korea plans to introduce a combined 22 percent tax—comprising a 20 percent national tax and a 2 percent local income tax—on annual crypto gains exceeding 2.5 million won starting January 1, 2027. Despite the tax having already been postponed multiple times since its original 2022 target date, Han warned that tracking cross-border and self-custody wallet transactions remains nearly impossible, creating an unfair burden on compliant traders who remain on heavily regulated domestic exchanges.
Han disputed government claims that international frameworks like the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework (CARF) will adequately capture offshore transactions. He estimated that CARF would cover less than 20 percent of total crypto trading, citing staggered global adoption timelines. He further cautioned that high earners might simply shift their activity abroad to avoid tax liability, emphasizing that cryptocurrency represents a borderless asset class.
In response to enforcement concerns, South Korean tax authorities maintain that overseas activity falls under the planned tax regime. The National Tax Service and the Ministry of Economy and Finance plan to rely on CARF data exchanges involving 48 participating countries alongside specialized wallet-tracing software. Tax officials have also collaborated with major domestic crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, to standardize transaction records and cost basis calculations.
The push to delay the levy comes amid rising public resistance and legislative debate. A public petition advocating for a two-year delay recently crossed the 50,000-signature threshold required for parliamentary committee review, following a similar petition in May that sought to eliminate the tax altogether. Meanwhile, legislative proposals range from pushing the start date out to 2030 to removing virtual assets from the Income Tax Act entirely, setting up a sharp debate as the 2027 launch date approaches.
