Bitcoin Magazine
South Korea Weighs Fourth Delay of Crypto Tax, With 2029 Start Tied to U.S. Data Sharing
South Korea’s presidential office is reviewing a fourth postponement of the country’s 22% tax on crypto gains, with a 2029 start date gaining support among lawmakers and industry groups.
The tax is scheduled to take effect January 1, 2027. The presidential office said it is in talks with government agencies about a delay, citing gaps in the regulatory framework and the problem of treating domestic and overseas trades the same way, according to Newsis reporting.
The levy dates to a 2020 amendment to the Income Tax Act. It applies a 20% national rate plus a 2% local rate to annual income from the transfer or lending of virtual assets above a 2.5 million won ($1,888) deduction. The start date was set for 2022, then pushed to 2023, 2025 and 2027 as officials conceded that tax systems and investor protections were not ready.
The U.S. data problem
The argument for 2029 rests on the OECD’s Crypto-Asset Reporting Framework, the standard under which tax authorities swap crypto transaction records with one another. South Korea is among the first group of jurisdictions set to begin exchanges in 2027. The United States does not join until 2029.
A presidential office official told Newsis that the absence of U.S. trading data is the biggest bottleneck. Without it, the National Tax Service would have to chase overseas transactions one by one, and Korean traders on domestic exchanges would carry a heavier burden than those on foreign platforms or in self-custody.
On October 16, Democratic Party lawmaker Park Min-gyu and 13 colleagues filed a bill that would push the tax to January 1 of the second year after the first international data exchange, which works out to 2029. People Power Party lawmaker Song Eon-seok filed a separate bill to strike the crypto tax provisions from the law.
The Korea Digital Asset Business Association backed the 2029 date Thursday and asked the government to pass a digital asset law with stock-market-grade investor protections before any tax takes effect.
A tax fight that has been building
The pressure has come from several directions at once. Last week, two public petitions, one to repeal the tax and one to defer it two years, each cleared the 50,000 signatures that force a legislative review. Democratic Party leader Kim Min-seok called for a “thorough final review,” a shift for a party that had held the line on 2027.
Finance Minister Lee Hyeong-il told a parliamentary audit Thursday the government would decide “after carefully considering and gathering all opinions from the industry and the National Assembly.” Financial Services Commission chairman Lee Eog-weon said the same day that the tax should “take various circumstances into full consideration.”
The Virtual Asset User Protection Act took effect in July 2024, but the Digital Asset Basic Act, the licensing framework flagged alongside spot bitcoin ETF approval, has not passed. Lawmakers have questioned taxing a market before the law defining it exists.
The National Tax Service has not slowed down. It plans to publish a draft notice on taxable crypto income by the end of October. The government expects to settle its position through inter-agency talks after audits wrap, with a decision through National Assembly tax revisions between late November and early December.
This post South Korea Weighs Fourth Delay of Crypto Tax, With 2029 Start Tied to U.S. Data Sharing first appeared on Bitcoin Magazine and is written by Micah Zimmerman.