South Korea Moves to Delay Crypto Gains Tax to 2029 in Fourth Postponement
Key Takeaways
- •South Korea's government endorsed delaying its cryptocurrency gains tax to 2029, the fourth postponement since the levy was originally scheduled to take effect in January 2022.
- •The proposed tax would apply a 22% rate, comprising a 20% income tax and a 2% local tax, to annual crypto gains above 2.5 million won ($1,860).
- •Officials justified the delay by pointing to 2029, when information exchanges with the United States are set to begin under the OECD's Crypto-Asset Reporting Framework.
- •The plan includes a three-year loss carryforward allowing investors to offset crypto losses against subsequent profits, with amendments to be submitted in parliament's 2027 regular session and detailed guidelines due in the first half of 2028.
- •The proposal reverses the Finance Ministry's May position that implementation would proceed in 2027, following engagement with major exchanges that cited unresolved rules for transaction types and insufficient infrastructure preparation time.
South Korea's government has endorsed a proposal to postpone its taxation of cryptocurrency gains by another two years, pushing implementation to 2029 in what would mark the fourth delay of the levy.
Finance Minister Lee Hyoung-il announced the plan on Thursday, stating that the government would consult lawmakers on moving the current January 2027 implementation date. If lawmakers sign off, crypto investors in South Korea would not face the levy until 2029, leaving gains on digital assets untaxed under this regime for at least two more years.
Under the proposal, the tax would impose a 22% levy on annual crypto gains exceeding 2.5 million won ($1,860), consisting of a 20% income tax and a 2% local tax.
The government justified the delay by pointing to 2029 as the year information exchanges with the United States are set to begin under the Crypto-Asset Reporting Framework (CARF), an OECD-developed standard for cross-border sharing of crypto-asset tax information. Taxing digital assets before those exchanges commence, officials argued, could place the domestic market at a disadvantage relative to overseas markets. The government also wants to account for changes under planned digital asset legislation.
Alongside the postponement, officials said they plan to introduce a three-year loss carryforward provision, allowing investors to offset crypto losses against profits earned over the following three years. Amendments to improve the tax system are expected to be submitted during parliament's regular session in 2027 — the step that would place the revised schedule before lawmakers — with detailed tax guidelines planned for the first half of 2028.
The crypto tax was originally scheduled to take effect in January 2022 but has since been postponed to 2023, 2025 and 2027. The latest proposal reverses the government's previous position, after a Finance Ministry official said in May that implementation would proceed in 2027.
South Korean finance officials recently engaged with major crypto exchanges amid growing calls to postpone the tax. Industry representatives cited unresolved tax rules for different transaction types and insufficient time to prepare the necessary infrastructure.
