South Korea Seeks Two-Year Delay to Crypto Tax Plan Until 2029

South Korea will seek to postpone its planned tax on cryptocurrency gains by two years, from 2027 to 2029. According to Sina Finance, Finance Minister Lee Hyeong-il said Thursday that the government would coordinate the proposal with the National Assembly, citing the timing of tax-information exchanges with the United States and the need to prepare regulatory changes. He said the government would use the two-year extension to prepare for implementation in 2029, after the plan had already been delayed three times. The government said taxing gains before South Korea begins exchanging virtual-asset information with Washington in 2029 could put the domestic cryptocurrency market at a disadvantage. The Finance Ministry said the proposed delay aims to uphold the principle that income is taxable while improving the taxation of domestic and overseas transactions, ensuring fairness among taxpayers, and establishing a stable tax framework. South Korea first proposed taxing virtual-asset gains in 2020, with implementation initially scheduled for January 2022. If approved, the latest proposal would be the fourth delay. Under the plan, a 22% tax, including local income tax, would apply to annual cryptocurrency gains exceeding 2.5 million won. The government plans to form a public- and private-sector working group to refine the tax system, develop detailed rules for different transaction types, and simplify tax filing. The Finance Ministry said the group would hold its first meeting soon and continue discussions through the first half of next year. The ministry plans to submit draft legal amendments to the National Assembly in 2027 and will monitor progress on international information-sharing arrangements for taxes on overseas transactions. The government also plans to let investors carry losses forward for three years to offset future gains, following practices in the United States and the United Kingdom. It will work with the Financial Services Commission to accelerate digital-asset legislation aimed at supporting sound market growth and protecting users’ rights.