South Korea Seeks to Push Crypto Tax Start to 2029

South Korea’s government will ask the National Assembly to delay its planned cryptocurrency gains tax by two years, shifting the proposed start from 2027 to 2029 as it prepares to exchange asset data with the United States. The Ministry of Finance and Economy’s Nov. 5 briefing said the government would consult lawmakers on the deferral. The tax is not yet in force, and the new date depends on legislative action.

How would South Korea’s crypto gains tax work?

Under the planned scheme, an individual’s annual cryptocurrency gains above 2.5 million won would face a 22 percent tax, including local income tax, according to Yonhap’s report on the announcement. The tax applies to the amount above that annual threshold. Seoul first legislated the scheme in 2020, with implementation initially set for January 2022. If lawmakers approve this latest delay, it would be the fourth postponement.

The proposed two-year shift gives the government time to prepare systems for collecting tax on domestic and overseas transactions. Tax authorities need records that let them assess gains across platforms and countries; overseas data exchange is one part of that recordkeeping chain. The ministry said information exchanges with the United States on virtual assets are set to begin in 2029. It argued that taxing before then could put South Korea’s domestic market at a disadvantage compared with overseas markets.

What does the government plan to change before 2029?

The government plans to set up a public-private working group to refine the tax system, develop detailed rules for different kinds of transactions and make tax filing easier. It said the group would begin work soon and discuss preparations through the first half of 2027. The ministry plans to submit legislative amendments to the National Assembly during its regular 2027 session.

One proposed change would let investors carry losses forward for up to three years to offset future gains. The government says it is considering the measure in light of cryptocurrency price volatility. That loss offset is a proposal, not a rule already in force. The government also plans to work with the Financial Services Commission to advance a digital asset law covering the industry’s development and user protection.

The timetable links tax collection to two preparations: lawmakers must approve the delay and related tax changes, while officials build the rules and data systems needed to apply the tax. The ministry says the aim is to improve fairness between taxpayers and make taxation of overseas trades more effective. For investors, the immediate change is a proposed later start; the tax rate and threshold described in the existing scheme remain subject to any legislative amendments.

Sources

• Ministry of Finance and Economy’s Nov. 5 briefing — mofe.go.kr
• Yonhap’s report on the announcement — m-en.yna.co.kr