South Korea is preparing to postpone its cryptocurrency gains tax for a fourth time, according to local reports, potentially extending the implementation deadline to 2029. The proposed delay would affect a tax policy originally scheduled to launch in 2022.
Under existing legislation, annual virtual asset profits exceeding 2.5 million won face a combined 22% tax, consisting of a 20% national levy and 2% local tax. The tax makes no provision for carrying losses into subsequent years.
Originally scheduled for 2022, the tax was postponed to 2023, then 2025, and most recently to January 1, 2027. A fourth postponement is now gathering political support, despite the tax surviving six years of legislative debate without collecting any revenue.
Enforcement Challenges Cited
A key complication involves the Organization for Economic Cooperation and Development's Crypto-Asset Reporting Framework, designed to help tax authorities exchange cryptocurrency transaction information across borders. South Korea expects to begin exchanging data in 2027, but the United States is not scheduled to participate until 2029. This two-year gap threatens to complicate enforcement against investors using overseas platforms.
On October 16, Democratic Party lawmaker Park Min-gyu introduced legislation linking the tax's implementation to the second year following South Korea's first CARF information exchange, which would correspond to 2029 under the anticipated timetable. Opposition lawmakers have floated similar postponements, with some proposals extending the deadline to 2030 or eliminating the tax altogether.
Political and Industry Pressure
A National Assembly petition demanding another two-year postponement collected more than 50,000 signatures, qualifying it for formal review. On October 20, finance ministry officials met representatives from South Korea's five major cryptocurrency exchanges and the Digital Asset Exchange Alliance to discuss implementation readiness.
Industry representatives warn that premature taxation could drive trading toward overseas exchanges while leaving domestic platforms facing heavier compliance costs. The presidential office has reportedly warmed to postponement, citing enforcement shortcomings, investor fairness concerns, and the delayed U.S. reporting timetable.
For now, January 1, 2027, remains the legally binding implementation date. Any change requires parliamentary approval.
