South Korea seeks to push crypto tax back to 2029

South Korea’s government will seek to delay its cryptocurrency gains tax by two years, moving the planned start from 2027 to 2029 and giving investors more time before the levy takes effect. Finance Minister Lee Hyoung-il announced the proposal on Nov. 5, a day after the ruling Democratic Party called for a delay; the Yonhap report on the government’s plan said the government would work with the National Assembly to pursue it.

The government says the delay would give it time to prepare for tax information exchanges with the United States, which are due to begin in 2029, and to adjust rules alongside changes to the digital-asset regulatory framework. It says taxing domestic trades before overseas transaction data is available could put South Korea’s crypto market at a disadvantage. The proposal still needs lawmakers’ approval.

What tax would investors face under the current plan?

Under the existing scheme, annual cryptocurrency gains above 2.5 million won would be taxed at 22%, including local income tax. The levy applies to the portion above that threshold, rather than to all gains. South Korea introduced the tax scheme in 2020, but its start date has been postponed repeatedly.

The ruling Democratic Party’s proposal on Nov. 4 was framed as a request for time to establish a broader framework and let businesses and investors adjust. Party leader Kim Min-seok said the party wanted the Digital Asset Basic Act enacted first, after reviewing taxation principles, domestic industry conditions and fairness among users, according to Yonhap’s report on the party proposal.

How does the proposal compare with the planned start?

Without a further delay, the tax is due to begin on Jan. 1, 2027, and investors would face the 22% rate on annual gains above the 2.5 million won allowance. If the new proposal is approved, the start would move to 2029, making it the fourth postponement. The government says the intervening period would help it improve the tax rules and prepare for overseas data sharing.

The government also plans to propose allowing investors to carry losses forward for up to three years to offset future gains, citing crypto price volatility. A public-private working group is expected to review rules for different transactions and ways to make tax filing easier through the first half of 2027. The finance ministry says it plans to submit legislative amendments during the National Assembly’s 2027 regular session, so both the delay and the loss-offset change remain proposals pending legislative action.

Source material

• Yonhap report on the government’s plan — en.yna.co.kr
• Yonhap’s report on the party proposal — m-en.yna.co.kr