South Korea's government announced on November 5 that the government would pursue a two-year delay in crypto income taxation, targeting 2029. The government plans to consult the National Assembly on the postponement. The government also proposed letting taxpayers carry losses forward for three years to reduce later taxable gains. Both proposals need legislative approval. National Tax Service (NTS) guidance still schedules taxes on eligible crypto transfers and lending to begin on January 1, 2027.
The Democratic Party requested another postponement on November 4, less than two months before the scheduled January 2027 implementation. Yonhap reported that party leader Kim Min-seok wanted the Digital Asset Basic Act to provide a comprehensive framework before companies and investors received an adjustment period. Kim also called for preparations involving overseas transaction information, verification of computer systems and guidance for taxpayers. Yonhap's account of Kim's November 4 remarks gave no alternative start date. However, Yonhap said committee members had focused mainly on a two-year postponement.
The government cited an expected exchange of crypto transaction information with the United States beginning in 2029 as a reason for additional preparation time. The government also cited changes expected under digital-asset legislation. An August 28 release from Representative Kim Sang-hoon describes an Income Tax Act amendment that would shift implementation from January 1, 2027 to January 1, 2029. That timetable depends on the amendment becoming law. The Democratic Party accepted a two-year moratorium in December 2024. The NTS says legislation passed that month established the January 2027 schedule.
The NTS framework for residents calculates crypto income from transfers and lending after subtracting acquisition costs and related expenses. The framework provides a basic deduction of 2.5 million won each year. The national income-tax rate is 20% after that deduction. Kim Sang-hoon's parliamentary release puts the combined rate at 22% after including local income tax. The tax calculation applies to income remaining after costs and the deduction, not the entire value of an investor's holdings.
For crypto acquired before January 1, 2027, the NTS sets the initial cost basis at the higher of the actual purchase cost or the asset's market value at the end of 2026. Residents offset annual gains against annual losses. Residents report the resulting income in May of the next year. These dates remain part of the currently scheduled regime until legislation changes the timetable.
South Korea Proposes Two-Year Delay for 22% Crypto Tax, Allows Loss Carryforwards
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Summary
South Korea plans to push back its 22% crypto tax to 2029, two years later than originally scheduled. The government also proposed letting investors carry forward losses for three years. The move follows pressure from the Democratic Party to adjust for regulatory and international compliance needs. The current 2027 timeline remains in place until changes are finalized. Traders are keeping an eye on altcoins to watch as the crypto market reacts to the delay.
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