South Korea Pushes for 2029 Cryptocurrency Tax Launch in Fourth Postponement Attempt
The South Korean government is pursuing yet another two-year postponement of its 22% cryptocurrency taxation plan, just months following its commitment to initiate taxation on digital asset profits starting January 2027.
The government of South Korea has expressed support for an additional two-year extension on its cryptocurrency gains tax, pushing the target implementation date to 2029 in what represents the fourth postponement of the taxation policy.
On Thursday, Finance Minister Lee Hyoung-il made the announcement public, stating that the government would engage in discussions with legislative members regarding the delay of the January 2027 rollout date.
Under the proposed taxation framework, crypto investors would face a combined 22% tax rate, which breaks down into a 20% income tax component and a 2% local tax component, applied to yearly cryptocurrency profits that surpass 2.5 million won ($1,860).
Government authorities pointed to 2029 as the year when information sharing with the United States will commence under the Crypto-Asset Reporting Framework (CARF). Officials indicated that implementing the taxation measure prior to the establishment of these international exchanges could disadvantage the domestic cryptocurrency market compared to foreign markets. Additional considerations include accommodating forthcoming changes in proposed digital asset regulatory legislation.
Government representatives additionally revealed intentions to implement a loss carryforward mechanism spanning three years, which would enable investors to deduct cryptocurrency losses against gains realized during the subsequent three-year period. The administration intends to present legislative amendments aimed at enhancing the taxation framework during the parliamentary regular session scheduled for 2027, while comprehensive tax implementation guidelines are slated for release in the first half of 2028.
The cryptocurrency tax was initially slated to become effective in January 2022 but has since undergone successive delays to 2023, 2025 and 2027.
This latest proposal marks a reversal from the government's earlier stance. In May, a Finance Ministry official had publicly stated that the tax implementation would move forward as scheduled in 2027.
Financial authorities in South Korea have recently held meetings with leading cryptocurrency exchange platforms as pressure mounts to defer the taxation policy. Representatives from the industry highlighted concerns including unclear tax regulations for various transaction categories and inadequate preparation time to develop the required technological infrastructure.