South Korea is reassessing its planned cryptocurrency tax amid mounting industry concerns ahead of the levy's scheduled January 2027 launch. Senior finance officials will meet representatives of the country's five major digital asset exchanges on October 20 to discuss implementation challenges and industry calls for another postponement. A newly proposed bill could push the tax back to 2029 by tying it to international data sharing, though the existing start date remains in force for now.

Officials to Consult Exchanges on Tax Readiness

According to a report by Yonhap News Agency, officials will sit down with representatives from Upbit, Bithumb, Coinone, DigitalX and Gopax on October 20 to review the planned crypto tax. Executives from the Digital Asset Exchange Alliance (DAXA) will also attend, alongside senior finance officials, as unclear tax rules and limited preparation time fuel demands for a fresh delay.

The meeting follows an October 6 statement to parliament by Finance Minister Lee Hyoung-il, who said the government would gather opinions from affected stakeholders. Authorities are weighing the industry's concerns while continuing preparations under the existing implementation schedule.

South Korea legislated its cryptocurrency income tax framework through amendments to the Income Tax Act in 2020, originally setting an effective date of January 1, 2022, but lawmakers have postponed its entry into force three times, leaving January 1, 2027 — now just over two months away — as the current start date. Under the existing framework, qualifying annual income from cryptocurrency transfers and lending is subject to a combined 22% tax, comprising national and local income tax, after a basic annual deduction of 2.5 million won. For investors, that would mean transfer and lending income above the deduction becomes taxable on the start date unless lawmakers delay it again.

Exchange representatives contend that unresolved rules and tight preparation timelines could complicate rollout. They have flagged uncertainty over the tax treatment of staking rewards, airdrops, hard forks and decentralized finance transactions — activities that raise questions about how taxable income should be classified and calculated. Exchanges also cite difficulties involving transaction reporting, investor holdings and incomplete records from overseas platforms.

New Bill Could Push Taxation Toward 2029

The debate intensified after Democratic Party lawmaker Park Min-gyu introduced an amendment to the Income Tax Act on October 16. The proposal would link the start of cryptocurrency taxation to the launch of international crypto transaction-data sharing under the Organisation for Economic Co-operation and Development's Crypto-Asset Reporting Framework (CARF), an OECD standard for tax authorities to automatically exchange crypto-asset transaction information across borders.

Under the proposed formula, taxation would begin on January 1 of the second year after the relevant information exchange first occurs. If qualifying data sharing starts in 2027, implementation could shift to January 1, 2029. The bill is designed to address concerns that users of domestic exchanges could face different treatment from investors on overseas platforms. It still requires legislative approval, however, leaving the existing January 2027 deadline unchanged.

Preparations Continue Pending Legislative Action

Meanwhile, South Korea's National Tax Service is continuing to draft implementation guidance, which officials expect around November. Lawmakers have instructed authorities to keep preparations on track unless the National Assembly formally approves another delay.

Beyond the tax question, the government is also advancing a proposed Digital Asset Basic Act covering broader industry regulation. Discussions include potential ownership limits for major exchange shareholders and requirements for issuers of won-denominated stablecoins.

The October 20 consultation could indicate whether industry concerns will shape the government's next steps. Until lawmakers change the existing framework, South Korea's cryptocurrency tax remains scheduled to take effect in January 2027.