- Seoul wants to delay the start of its 22% crypto gains tax by two years to 2029.
- It would be the fourth delay since 2020, following three previous postponements.
- The Assembly must amend the law before January or 2027 stays the first tax year.
Crypto investors in South Korea would get two more years before paying tax on trading profits under a plan announced by Seoul on Thursday. It would be the fourth time the levy has slipped since it became law in 2020.
Finance Minister Lee Hyoung-il, who is also deputy prime minister, told an emergency briefing in Seoul that the ministry “will consult with the National Assembly to pursue a two-year deferral of taxation on cryptocurrency income.” Because the tax is written into law, lawmakers must amend it before January for the delay to take effect.
The Timeline
- 2020: the tax is written into the Income Tax Act.
- Three postponements follow, the latest through a December 2024 amendment that set January 2027 as the start.
- Thursday: Finance Minister Lee Hyoung-il says the ministry will work with the National Assembly to move the start to 2029.
- The Assembly must change the law before January. Otherwise 2027 stays the first taxable year, with returns filed in May 2028.
What Traders Would Owe
Annual profits from selling or lending digital assets above 2.5 million won ($1,860) would face a 22% charge, local income tax included. Gains and losses for the year are netted against each other.
Seoul’s Case for Waiting
Officials say three things are not ready:
- Tax data sharing with the United States, which only starts in 2029. Backers of the delay say gaps in overseas records could push enforcement onto domestic exchange users.
- Rules on deducting past losses. A three-year carry-forward is under discussion.
- New market regulation tied to a pending digital asset law.
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Pressure From Within the Ruling Camp
The Democratic Party’s leader, Kim Min-seok, asked for the delay on Wednesday, and the government agreed within a day. Rep. Oh Gi-hyoung, a senior party member on the finance committee, said the party’s majority saw a longer lead time as “unavoidable.” Political observers also pointed to weakening backing among young adults, who make up the bulk of crypto investors.
What Remains Open
The tax is postponed, not abandoned. The Digital Asset Basic Act, which would cover areas such as stablecoins and exchange licensing, is still stuck in an Assembly committee.
The delay gives South Korean crypto traders more time before they owe tax, so the market may stay much as it is for now. Traders have less reason to move their money abroad to avoid the tax, which could keep much of the trading on local exchanges. The delay could also help keep younger investors in the market, since people in their 20s and 30s are the main crypto traders and have pushed back against the 2.5 million won tax-free limit.
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