South Korea Lawmaker Han Dong-hoon Demands Two-Year Crypto Tax Delay, Saying Overseas Trades Stay Invisible to the Tax Office

A senior South Korean lawmaker has called for the country’s long-delayed cryptocurrency tax to be pushed back by another two years, arguing that authorities still lack enough overseas trading data to enforce the levy consistently before its Jan. 1, 2027 start. Han Dong-hoon, an independent lawmaker and former leader of the People Power Party, raised the issue in a Sep. 15 Facebook post as South Korea moves closer to finally introducing a tax that has already been postponed three times. News1 reported his comments, which land amid a live petition on the National Assembly website seeking another delay that has already crossed the 50,000 signature threshold required for parliamentary review.

The core argument: taxation without visibility

Han’s criticism focuses on the government’s ability to identify taxable activity once crypto leaves South Korean trading platforms. Investors are legally allowed to transfer cryptocurrency held on domestic exchanges to accounts under their own names on overseas platforms, or to move the assets into private wallets. Once assets leave regulated domestic venues, Han argued, following every subsequent transfer becomes close to impossible.

“Is it right to rush into starting this cowardly taxation?” Han wrote, questioning whether taxation should begin at a moment when crypto can move legally from domestic exchanges to foreign platforms and private wallets. He predicted that investors expecting annual profits above the deduction threshold could simply shift their trading activity overseas once taxation begins. “Virtual assets are assets that change hands without borders,” he said.

The fairness problem he highlighted is structural: investors who keep using regulated domestic exchanges are easier for the National Tax Service to track, while those who move offshore or into self-custody become harder to reach. Han noted the tax was postponed while he was leading the People Power Party in 2024, but argued that the underlying implementation problems have not been resolved in the two years since.

What the 2027 tax actually imposes

Under South Korea’s current rules, qualifying income from transferring or lending virtual assets becomes taxable from Jan. 1, 2027. Annual gains above a 2.5 million won basic deduction face a 20 percent national tax, with a 2 percent local income tax bringing the combined rate to 22 percent. Taxable income is calculated from annual proceeds after acquisition costs and eligible transaction expenses are deducted, with gains and losses combined before the deduction is applied, and the income classified separately as other income. Investors earning taxable crypto income during 2027 would file their first returns in May 2028.

The tax dates back to Income Tax Act amendments approved in 2020. Implementation was initially planned for 2022, then postponed to 2023, then 2025, and finally 2027 as lawmakers debated reporting infrastructure and administrative readiness. The Ministry of Economy and Finance kept the January 2027 launch when it finalized its 2026 tax reform proposal in August, and the government has so far held that line.

CARF coverage and wallet tracing in dispute

The government maintains that overseas activity will remain within the tax regime. In August, the Finance Ministry and National Tax Service confirmed the tax covers income generated through overseas exchanges and private wallets, pointing to overseas financial account reporting requirements and the OECD’s Crypto-Asset Reporting Framework as tools for capturing activity outside the country. The ministry has said South Korea expects to receive transaction data from 48 participating jurisdictions, including Japan, Germany and France, as international information exchange begins.

Han disputed whether CARF will provide sufficient coverage by the time taxation starts. He claimed the framework could cover less than 20 percent of cryptocurrency trading, and noted that participating countries are scheduled to begin exchanging information at different times, a figure that reflects his stated estimate rather than an independently established measurement.

Private wallets present a separate enforcement gap because blockchain addresses do not automatically identify the person controlling them. The NTS has acknowledged practical limits in identifying every unreported private wallet transaction, even though self-custody does not exempt qualifying income from the planned tax. To close part of that gap, South Korea plans to introduce commercial wallet tracing software capable of following transfers between blockchain addresses, and the tax office has completed a tax source management system while developing an integrated analysis system for virtual asset taxation. The NTS has also worked with Upbit operator Dunamu, Bithumb, Coinone, Korbit and Gopax on guidance covering the transaction records needed to calculate taxable income.

The government’s counterargument

Finance officials argue the implementation infrastructure has progressed considerably since the earlier delays. During a Sep. 15 National Assembly confirmation hearing, finance minister nominee Lee Hyoung-il said the government intends to proceed with taxation next year, noting that lawmakers already postponed implementation to 2027 during 2024 discussions. Lee cited government statistics showing 85 percent of crypto investors hold less than 5 million won in assets, arguing the impact on most investors will be limited because of the 2.5 million won basic deduction and rules governing acquisition costs.

Han countered with a different principle: income from domestic stocks, overseas stocks and cryptocurrency should not receive substantially different tax treatment if the government considers all of them investment activity. With the petition over the 50,000-signature threshold, a confirmation hearing on record defending the timeline, and implementation barely 15 months away, the January 2027 start date now faces its most organized political challenge yet. Separately, digital assets have been included in South Korea’s overseas financial account reporting system since 2023 filings, and the NTS recently ruled that qualifying overseas crypto accounts remain reportable even when the exchange holding them has entered bankruptcy.