South Korea’s presidential office is currently evaluating a fourth postponement of the nation’s 22% levy on cryptocurrency gains, with a potential 2029 implementation date now garnering backing from industry organizations and lawmakers.
Although the taxation is currently slated to begin on January 1, 2027, the presidential office noted that it is holding discussions with various government agencies regarding a potential delay. According to reports from Newsis, these talks stem from ongoing regulatory framework deficiencies and the challenge of applying uniform rules to both domestic and international trades.
Originating from a 2020 revision to the Income Tax Act, the assessment imposes a 20% national rate alongside a 2% local rate on yearly earnings derived from the lending or transfer of virtual assets, provided they exceed a deduction threshold of 2.5 million won ($1,888). Initially targeted for 2022, the enforcement date has previously been deferred to 2023, 2025, and 2027 as government officials acknowledged that neither investor safeguards nor tax infrastructure were adequately prepared.
The U.S. data problem
Advocacy for a 2029 timeline is anchored in the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework—the protocol governing the mutual exchange of digital asset transaction data among tax watchdogs. While South Korea is positioned within the initial wave of regions commencing data swaps in 2027, the United States is not scheduled to participate until 2029.
An official from the presidential office informed Newsis that the lack of American trading data presents the primary hurdle. Without this information, the National Tax Service would be forced to investigate foreign transactions individually, placing a disproportionate compliance weight on Korean investors utilizing local exchanges compared to those relying on self-custody solutions or foreign platforms.
On October 16, Democratic Party member Park Min-gyu joined 13 peers in submitting legislation that would defer the tax until January 1 of the subsequent year following the initial global data exchange, effectively targeting 2029. Concurrently, Song Eon-seok, a lawmaker representing the People Power Party, introduced separate legislation aimed at entirely removing the crypto tax clauses from the statute.
The Korea Digital Asset Business Association voiced its support for the 2029 timeline on Thursday, urging authorities to enact a comprehensive digital asset framework featuring equity-market-level investor protections prior to the introduction of any tax policies.
A tax fight that has been building
Momentum for a delay has intensified simultaneously across multiple fronts. Last week, two public petitions—one advocating for the complete abolition of the tax and another requesting a two-year deferral—both surpassed the 50,000-signature requirement, thereby triggering a mandatory parliamentary examination. Meanwhile, Democratic Party leader Kim Min-seok urged a “thorough final review,” marking a departure from the party’s previously steadfast stance on maintaining the 2027 start date.
During a parliamentary audit on Thursday, Finance Minister Lee Hyeong-il stated that the administration will reach a determination “after carefully considering and gathering all opinions from the industry and the National Assembly.” On the same day, Financial Services Commission chairman Lee Eog-weon remarked that the tax ought to “take various circumstances into full consideration.”
While the Virtual Asset User Protection Act was enacted in July 2024, the broader Digital Asset Basic Act—the licensing structure highlighted during discussions surrounding spot bitcoin ETF approval—remains unpassed. Consequently, legislators have raised concerns about taxing an asset class before the legislation formally defining it has been established.
Despite these deliberations, the National Tax Service continues its preparations and intends to release a draft notice regarding taxable cryptocurrency income before the conclusion of October. The administration anticipates finalizing its official stance through inter-agency negotiations following the completion of audits, with a final resolution expected via National Assembly tax revisions scheduled between late November and early December.
FAQ
Why is South Korea considering delaying the crypto tax again?
Officials cite gaps in the regulatory framework, difficulties in treating domestic and foreign trades equally, and the absence of U.S. trading data until 2029 under international data-sharing rules.
What is the proposed new start date for the crypto tax?
Lawmakers and industry groups are gaining support for a 2029 implementation date, tied to the OECD’s global crypto data exchange timeline.
How much is the proposed crypto tax in South Korea?
The levy is a 22% tax—consisting of a 20% national rate and a 2% local rate—applied to annual gains from transferring or lending virtual assets above a 2.5 million won ($1,888) deduction.
When will the final decision on the tax delay be made?
The government expects to finalize its position through inter-agency talks and National Assembly tax revisions between late November and early December.
