South Korea Plans Fourth Delay of 22% Crypto Tax to 2029, Adds Three-Year Loss Carryforward

Government seeks to push the tax to 2029

South Korea’s government plans to ask lawmakers to delay its 22% tax on cryptocurrency gains by another two years, to 2029, Finance and Economy Minister Lee Hyeong-il said on Thursday.

The tax is scheduled to take effect in January. The National Assembly would need to amend the Income Tax Act before then, and Lee said the government would seek approval during this year’s regular session. This would be the fourth delay since the tax was written into law.

Key numbers on the proposed tax

• Tax rate: 22%, including local income tax, on annual net income above 2.5 million won, or about $1,869
• New start date proposed: 2029
• Loss carryforward: losses realized in one year could offset gains for up to three years
• Previous planned starts: 2022, then pushed to 2023, 2025 and 2027

Main reason cited: overseas trading data

Lee said the main reason for the new delay is data on overseas trading. When investors move tokens bought abroad onto a Korean exchange, a place where crypto is bought and sold, the exchange may have no record of the purchase price needed to calculate a taxable gain.

That gap is expected to close in 2029, when Korea and the United States begin exchanging information under the OECD-backed Crypto-Asset Reporting Framework, or CARF. The government said introducing the tax before then could put Korea’s domestic crypto market at a disadvantage.

“Once we begin receiving cryptocurrency transaction data from the United States in 2029, we will have enough information to tax investors who use US exchanges on the same basis as those who trade in the domestic market,” Lee said.

The government also cited the need to align the tax with the proposed Digital Asset Act, which would set rules for digital asset businesses and strengthen investor protection. Exchanges, investors and lawmakers had pressed for more time, with exchanges saying unclear reporting requirements held up system development and testing.

What a three-year loss carryforward would mean

The tax rate itself is not changing. Individuals would pay 22% on annual net income above 2.5 million won from selling or lending virtual assets such as bitcoin.

What is new is a proposed three-year loss carryforward. Under current law, only losses from the same year can offset gains. Under the proposal, losses realized in 2029 could offset gains through 2032. Losses realized before the tax takes effect would not be eligible, the government said, citing the volatility of crypto prices.

The finance ministry said the carryforward would follow similar practices in the U.S. and Britain. It also said it will work with the Financial Services Commission to speed up the digital asset law.

What is confirmed and what still depends on lawmakers

The government’s plan, the minister’s comments, and the proposals on timing and loss carryforward are confirmed in the source. Whether the delay happens depends on the National Assembly passing the amendment in the coming weeks. The government said detailed tax guidelines are due in the first half of 2028.

The workout plans to use the extra two years to collect overseas trading records and analyze them alongside domestic tax data. A working group of industry representatives, experts and government officials will review tax rules for different types of transactions and ways to simplify filing through the first half of 2027. If the review finds that more legislation is needed, the government plans to submit amendments during the National Assembly’s 2027 regular session.

Why the timing matters

For Korea’s large base of retail crypto traders, the announcement extends a tax-free window that was supposed to close in 2022. The government said the delay is linked to receiving U.S. transaction data from 2029 and to aligning the tax with broader digital asset rules.

Sources

• Bitcoin Magazine

Read also: Greece approves 10% tax on crypto gains, with €500 annual exemption

Read also: South Korea Proposes Delaying Cryptocurrency Tax Until 2029