South Korea's 22% Crypto Tax Faces Fourth Delay Until 2029

Key Insights

• South Korea’s crypto tax faces a fourth postponement as presidential officials favor delaying implementation until 2029.
• The proposed 22% levy targets annual cryptocurrency income exceeding a 2.5 million won deduction.
• Lawmakers will review tax legislation in November amid concerns about overseas exchange reporting and U.S. participation.

South Korea’s crypto tax could face another two-year postponement after presidential officials backed delaying implementation. Seoul Economic Daily reported the discussions on Oct. 25, citing incomplete collection preparations and enforcement concerns.

The proposed delay would move the 22% levy from January 2027 to January 2029. However, the government has not finalized the decision, and parliamentary approval remains necessary.

A presidential office official said on October 25 that discussions had shifted toward postponing the tax, according to Seoul Economic Daily. The office has not announced a final decision. Government and ruling-party representatives plan consultations before lawmakers consider changes to the Income Tax Act.

South Korea introduced the tax provisions in 2020 and planned to begin collecting the levy in January 2022. Authorities later moved the start date to 2023, then 2025 and finally 2027. Another change would mark the fourth postponement of the country’s cryptocurrency income tax.

Government officials have cited gaps in collection preparations and concerns among younger investors. Government data counted 11.175 million domestic accounts with cryptocurrency trading access at the end of June, according to financial authorities.

An investor petition against the 2027 start date reached 50,000 signatures and qualified for legislative review in September. The debate also follows meetings between finance authorities and cryptocurrency industry representatives about the rules that exchanges and investors would need to follow.

The current law sets a combined tax rate of 22% on qualifying annual income from selling, transferring, or lending virtual assets. The total includes a 20% national income tax and a 2% local income tax. Investors would first subtract a basic allowance of 2.5 million won from their annual taxable gains.

Under that formula, an investor with 5 million won in qualifying annual gains would owe 550,000 won in taxes. The crypto tax would apply to gains above the allowance rather than the full value of an investor’s cryptocurrency holdings.

Crypto tax authorities have also examined how to calculate income involving staking rewards, airdrops, and decentralized finance transactions. Exchanges have sought clearer guidance on reporting requirements and transaction records.

At an October 20 meeting, finance officials gathered feedback from representatives of five major exchanges. Their discussions included practical questions about calculating taxable gains across different transactions.

The government previously maintained the January 2027 start date in its August tax reform plans before fresh calls for postponement gained support.

Access to overseas trading data has become a central issue in the discussions. South Korean authorities can gather records from domestic platforms, but transactions through foreign exchanges present additional reporting challenges.

Officials worry that domestic exchange users could face stricter enforcement than investors who trade abroad.

The government has linked those concerns to the Crypto-Asset Reporting Framework, known as CARF. The international system enables tax authorities to exchange information about cryptocurrency users’ residence and transactions. South Korea expects international exchanges of relevant information to begin in 2027.

The United States plans to participate in CARF from 2029, leaving a gap between South Korea’s current tax start date and American participation. According to the crypto news, the government has also yet to complete legislation establishing a broader framework for digital assets.

Democratic Party lawmaker Park Min-kyu introduced an Income Tax Act amendment on Oct. 16. The proposal would postpone cryptocurrency taxation until January 2029. Twelve additional Democratic Party lawmakers and one Rebuilding Korea Party lawmaker supported the legislation.

Opposition People Power Party lawmakers also backed postponement, citing administrative and investor concerns.

However, lawmakers have expressed different views about the broader taxation framework.

Democratic Party lawmaker Yoon Hou-duck previously questioned repeated delays after successive government promises to prepare collection systems.

The National Assembly’s tax subcommittee plans to begin reviewing pending legislation on Nov. 2.

The crypto tax proposal will face further consideration alongside the government’s wider tax reform package.

Parliament must approve any amendment before the statutory January 2027 implementation date moves.

Until then, the existing law remains unchanged despite growing political support for a delay.

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