South Korea’s presidential office is now leaning toward postponing the country’s planned 22% tax on cryptocurrency gains for a fourth time, with ruling-party lawmakers proposing to push the start date from January 1, 2027 to 2029. No final decision has been made, and the 2027 date remains the law until the National Assembly passes an amendment.
Fourteen lawmakers from the governing camp, including Democratic Party lawmaker Park Min-gyu, have jointly submitted a bill setting 2029 as the new start date. The main opposition People Power Party also backs a delay, though some of its members have floated an even later date or outright repeal. Party leader Kim Min-seok said the matter “needs to be settled this year.”
The levy, introduced through a 2020 revision to South Korea’s Income Tax Act, would combine a 20% national income tax and a 2% local income tax on annual gains from selling or lending digital assets, after a basic deduction of 2.5 million won (about US$1,900). It has already been delayed three times — from 2022 to 2023, then 2025, then 2027 — and a fourth postponement would push it to 2029.
Officials cite two main reasons for the renewed delay push: incomplete domestic collection infrastructure, and a gap in cross-border data. South Korea expects to start exchanging crypto account data with other jurisdictions in 2027 under the OECD’s Crypto-Asset Reporting Framework (CARF), but the United States has signaled it will not join CARF until 2029 — meaning investors on licensed Korean exchanges such as Upbit, Bithumb and Coinone could face stricter enforcement than those trading through foreign platforms if the tax started before that gap closes.
Under the scheduled rules, the tax is comparatively simple to calculate where every transaction sits on a domestic, licensed exchange, but harder to track where assets move between domestic platforms, foreign exchanges and self-hosted wallets. For investors with straightforward domestic gains, worked examples under the current framework show a liability of roughly 550,000 won on 5 million won of annual gains, and about 21.45 million won on 100 million won of gains, after the 2.5 million won deduction. The scheduled framework also does not currently allow investment losses to be carried forward to offset gains in a later year — a design issue officials say would need separate legislation to fix, regardless of when the tax takes effect.
South Korea’s National Tax Service met representatives of five major cryptocurrency exchanges on October 20 to discuss implementation questions, including how income from staking, airdrops and decentralized-finance transactions would be calculated; tax reporting guidelines had been expected in November. The presidential office has not published estimates of how a further delay would affect tax receipts or trading volumes.
For anyone holding crypto assets with ties to South Korea, the practical point is unchanged regardless of how the political debate resolves: keeping reliable records of acquisition costs, disposals and transfers between exchanges and wallets will be necessary whenever collection eventually begins. Parliament is expected to take up the amendment during November’s tax-law review, after October’s state-affairs audit concludes.
References
BigGo Finance – South Korea Weighs Fourth Delay of 22% Crypto Tax, Pushing Start to 2029
