Report: Bill Seeks to Abolish South Korea’s 22% Digital Asset Tax

The proposal, submitted March 19, 2026, marks the latest twist in a years-long saga that has seen regulators, politicians, and investors locked in a tug-of-war over how — or whether — to tax digital asset profits.

At the center of the debate is a flat tax structure first introduced in 2020–2021, which would impose a 20% national tax plus a 2% local tax on annual gains exceeding 2.5 million Korean won, roughly $1,700 to $1,900.

The policy has been anything but stable. Initially slated for rollout as early as 2022, it has since been postponed three times — first to 2023, then to 2025, and most recently to 2027 under the country’s 2025 Tax Reform Bill.

Enter the new bill from the People Power Party, spearheaded by Rep. Song Eon-seok, which seeks to delete all provisions related to digital asset taxation from the Income Tax Act — not delay, not revise, but erase.

Then there is the practical side. Tracking acquisition costs, especially for foreign participants or assets moved across platforms, is no small feat, and critics say enforcement could become more theater than function.

That raises an awkward question: What happens if the tax disappears just as the machinery to enforce it goes live?

For now, the repeal faces a steep political climb. The ruling Democratic Party has signaled it will review the bill but has not indicated strong internal momentum, leaving its fate dependent on cross-party alignment and broader legislative priorities.

If it fails, the clock resets to 2027, when investors could finally face a tax regime that has spent years in preview mode.