South Korea’s main opposition party, the People Power Party (PPP), has recently introduced a bill to abolish the planned cryptocurrency capital gains tax.
This tax, often referred to as a 20% rate; technically 20% national income tax plus 2% local surcharge, totaling up to 22%, targets annual gains exceeding 2.5 million Korean won roughly $1,665–$1,900 USD. It was originally legislated in 2020 but has been postponed multiple times due to industry pushback, investor concerns, and political debates—shifting from an initial 2022 start to the current scheduled date of January 1, 2027.
As of March 2026, cryptocurrency gains remain untaxed in South Korea—no capital gains tax on crypto applies yet. The PPP’s bill, proposed around March 19, 2026 spearheaded by figures like Rep. Song Eon-seok, seeks to amend the Income Tax Act by completely removing the provisions for digital asset taxation.
Key arguments include: Tax unfairness — Traditional investments like stocks are no longer subject to similar income taxes following recent policy changes, creating an uneven playing field for crypto investors. Risk of stifling innovation in the blockchain and digital asset sector.
Concerns over enforcement, double taxation risks, and disproportionate impact on retail investors. The ruling Democratic Party has indicated it will review and discuss the proposal, though no firm commitment to support or oppose has been finalized.
This is the latest development in a long-running saga, with prior delays reflecting similar pressures.This move has generated positive sentiment in crypto communities, including on X, where users highlighted it as potentially bullish for adoption, liquidity, and market momentum in South Korea—one of the world’s largest crypto markets.
If passed, it would eliminate the tax entirely rather than just delay it again. However, the bill must go through the National Assembly process, so the outcome remains uncertain at this stage. Japan’s cryptocurrency tax policies remain in a transitional phase, with significant reforms proposed but not yet fully implemented.
Cryptocurrency gains in Japan are classified as miscellaneous income under the National Tax Agency (NTA) guidelines. This includes profits from trading, mining, staking rewards, airdrops, and other crypto-related activities. Gains are added to your total taxable income and subject to progressive income tax rates (national) plus a flat 10% local inhabitant tax.
National income tax brackets range from 5% (on lower income) up to 45% (on income over ¥40 million, approx. $260,000+ USD), resulting in a maximum effective rate of around 55% for high earners when including local tax.
There is no separate capital gains tax category for crypto unlike stocks or other securities, which enjoy a flat ~20% rate under separate taxation. Losses from crypto can offset other miscellaneous income but not salary or business income in most cases, and carry-forward rules are limited.
Reporting is required if annual miscellaneous income exceeds ¥200,000 (~$1,300 USD), with detailed transaction records needed in yen terms. This high progressive rate has been criticized for discouraging retail and institutional participation, pushing some trading activity overseas or into indirect vehicles like Bitcoin-related stocks.
In late 2025 (December), Japan’s ruling coalition released the 2026 Tax Reform Outline, proposing major changes to align crypto more closely with traditional financial assets like equities:Introduce a flat separate taxation rate of 20.315%; 20% national + 0.315% reconstruction surtax, often rounded to 20% on gains from specified crypto assets.
This would apply to certain transactions involving digital assets handled by registered Financial Instruments Business Operators under the Financial Instruments and Exchange Act (FIEA). Major cryptocurrencies like Bitcoin and Ethereum are expected to qualify as “specified” assets on licensed domestic exchanges.
The reform aims to level the playing field with stocks/investment trusts (already at ~20%) and boost domestic adoption, innovation, and revenue through increased activity. Additional elements include potential loss carry-forwards, mandatory disclosures for listed tokens, insider trading rules, and broader regulatory oversight.
The changes are contingent on amendments to the FIEA and other laws. Implementation is targeted for transactions on or after January 1, 2028, though some sources reference earlier application or phased rollout starting 2026/2027 for eligible assets.
As of March 2026, these reforms have been approved in the tax blueprint and supported by the government/FSA, with momentum following political developments. However, they await full legislative passage in the Diet (parliament) during 2026 sessions. No major changes have taken effect yet—crypto remains under the progressive miscellaneous income regime.
This shift is viewed positively in the crypto community as a step toward making Japan more competitive globally, similar to how stock taxation works, and could encourage institutional entry and domestic trading revival.






