South Korea Proposes Delaying Cryptocurrency Tax Until 2029
South Korea seeks another two-year delay for crypto gains tax
South Korea’s government is proposing to delay the implementation of its cryptocurrency gains tax by another two years. If approved, the tax would not take effect until 2029. This would be the fourth time the country has postponed the start of this tax.
Finance Minister Lee Hyoung-il announced the plan on Thursday. The government intends to consult with lawmakers about moving the current start date, which was scheduled for January 2027.
Details of the 22% tax plan
- The proposed tax is a 22% levy on annual profits from digital assets.
- This consists of a 20% income tax and a 2% local tax.
- The tax would apply to gains that exceed 2.5 million won, which is approximately $1,860.
- Investors would be allowed to carry forward losses for three years to offset future profits.
Finance Minister explains the shift in timeline
The government cited international reporting standards as a primary reason for the delay. South Korea is expected to begin exchanging information with the United States under the Crypto-Asset Reporting Framework (CARF) in 2029. Officials stated that starting the tax before these exchanges begin could put the local market at a disadvantage compared to foreign markets.
Finance Minister Lee Hyoung-il also noted that the delay would allow the government to align the tax system with upcoming digital asset legislation.
Exchanges and industry leaders raise concerns
South Korean officials recently held meetings with major crypto exchanges, which are platforms where people buy and sell digital currencies. Industry representatives argued that tax rules for different types of transactions are not yet clear. They also stated that more time is needed to build the necessary technical infrastructure to track and report these trades accurately.
What is confirmed about the proposal
It is confirmed that the South Korean government has officially backed the proposal to postpone the tax until 2029. The original plan was to begin taxing digital assets in 2022, but previous postponements moved the date to 2023, 2025, and then 2027. This new proposal reverses the government's previous stance from May, when officials said they would proceed with the 2027 date.
Expected timeline for legislative action
The government plans to submit formal amendments to the tax system during the regular session of parliament in 2027. Detailed guidelines on how the tax will be applied are expected to be released in the first half of 2028, leading up to the proposed 2029 start.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.