CoinDesk
South Korea is leaning toward delaying its cryptocurrency gains tax until 2029, marking a potential fourth postponement of the levy. The tax is currently scheduled to begin on Jan. 1, 2027, but officials are concerned that domestic exchange users would carry the burden while authorities lack comparable data from U.S. platforms.
Under the current rules, annual net income from crypto transfers or lending would face a 20% tax, rising to 22% after local income tax, following a 2.5 million won deduction. A fourth delay would require parliament to amend the law, with a final decision expected by early December.
Why it matters
The dispute centers on the timing of cross-border crypto reporting under the OECD's Crypto-Asset Reporting Framework. South Korea, Japan and the U.K. are due to begin exchanging data in 2027, followed by Singapore, Switzerland and Hong Kong in 2028. The U.S. is not scheduled to begin until 2029.
An official described the lack of U.S. tax data as the biggest obstacle, noting that almost half of the crypto market is in the United States. South Korean authorities previously argued that foreign financial account reporting could help track offshore holdings, but the government's position has since shifted toward seeking broader input from parliament, experts and industry.
Market impact
A delay would reduce near-term tax pressure for South Korean crypto users and exchanges, particularly those with activity spread across domestic and U.S. platforms. It would also leave the country's tax framework out of step with jurisdictions that already tax crypto without waiting for full cross-border data exchange.
The policy direction remains subject to parliamentary approval. Lawmaker Park Min-kyu has proposed moving the start date to Jan. 1, 2029, while the National Tax Service still lists Jan. 1, 2027 as the effective date.
Frequently asked questions
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Why is South Korea considering another delay to its crypto gains tax?
Officials are concerned that authorities cannot fully track activity on U.S. platforms before the U.S. begins sharing crypto trading data in 2029. They fear domestic exchange users would bear a disproportionate tax burden.
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How much would South Korea's crypto gains tax be?
Annual net income from crypto transfers or lending would face a 20% tax, or 22% including local income tax, after a 2.5 million won deduction.
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When is South Korea's crypto tax currently scheduled to start?
The current rules list Jan. 1, 2027 as the start date. The National Tax Service still displays that date while lawmakers consider a further postponement.
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How does the international reporting timetable affect the proposal?
South Korea, Japan and the U.K. are due to exchange crypto data in 2027, while Singapore, Switzerland and Hong Kong follow in 2028. The U.S. is scheduled to begin in 2029.
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What must happen for South Korea to move the tax date to 2029?
Parliament must approve an amendment to the law. A final decision is expected by early December, and a lawmaker has proposed Jan. 1, 2029 as the new start date.
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