South Korea's presidential office is reviewing a fourth delay to the country's cryptocurrency tax on gains, with a 2029 implementation date gaining support among lawmakers and industry groups.
The tax is currently scheduled to take effect on January 1, 2027. The presidential office said it is reviewing a postponement due to gaps in the regulatory framework and concerns about treating domestic and overseas trades identically, according to reporting by Newsis.
The levy, established through a 2020 amendment to the Income Tax Act, imposes a 20% national rate plus a 2% local rate on annual income from crypto asset transfers or lending above a 2.5 million won deduction. The implementation date has been pushed three times previously—originally set for 2022, then delayed to 2023, 2025, and most recently to 2027—as officials acknowledged that tax systems and investor protections were not ready.
U.S. Data Exchange Drives 2029 Timeline
Support for a 2029 start date centers on the OECD's Crypto-Asset Reporting Framework, a standard for tax authorities to exchange crypto transaction records. South Korea is among the first jurisdictions scheduled to begin exchanges in 2027, but the United States does not participate until 2029.
A presidential office official told Newsis that the absence of U.S. trading data represents the primary obstacle. Without it, South Korea's National Tax Service would need to pursue overseas transactions individually, placing a heavier burden on Korean traders using domestic exchanges compared to those on foreign platforms or in self-custody arrangements.
On October 16, Democratic Party lawmaker Park Min-gyu and 13 colleagues introduced a bill delaying the tax to January 1 of the second year after the first international data exchange, aligning with a 2029 start. Separately, People Power Party lawmaker Song Eon-seok filed a bill to remove crypto tax provisions from the law entirely.
The Korea Digital Asset Business Association backed the 2029 date and requested the government establish a digital asset law with stock-market-level investor protections before implementing the tax.
Growing Political and Public Pressure
Pressure for delay has mounted from multiple directions. Two public petitions—one to repeal the tax and another to defer it two years—each surpassed the 50,000-signature threshold requiring legislative review. Democratic Party leader Kim Min-seok called for a "thorough final review," marking a shift for a party that had previously maintained support for the 2027 date.
Finance Minister Lee Hyeong-il told a parliamentary audit on Thursday that the government would decide "after carefully considering and gathering all opinions from the industry and the National Assembly." Financial Services Commission chairman Lee Eog-weon stated the same day that the tax should "take various circumstances into full consideration."
The Virtual Asset User Protection Act took effect in July 2024, but the Digital Asset Basic Act—the licensing framework tied to spot bitcoin ETF approval—remains unpassed. Lawmakers have questioned imposing taxes on a market before enacting the law that defines it.
The National Tax Service continues its work independently, with plans to publish a draft notice on taxable crypto income by the end of October. The government expects to finalize its position through inter-agency talks after audits conclude, with a final decision expected through National Assembly tax revisions between late November and early December.
