South Korea’s finance ministry wants to put off taxing cryptocurrency profits for another two years, moving the planned start date to 2029 instead of 2027. Finance Minister Lee Hyoung-il announced the shift at a briefing on Nov. 5, according to Yonhap, in what would be the fourth time Seoul has pushed back the long-promised levy.
- Finance Minister Lee Hyoung-il said Nov. 5 that Seoul will push the start of crypto gains taxation back two years, from 2027 to 2029, according to Yonhap.
- If approved, this would mark the fourth postponement since the tax was first legislated in 2020 for a planned 2022 rollout, Yonhap reported.
- Under the pending rules, a 22% levy (including local income tax) would apply to yearly crypto profits above 2.5 million won, roughly $1,869–$1,900, per Korea Times and Yonhap.
- The government cited the 2029 start of virtual-asset information sharing with the United States and pending changes under the proposed Digital Asset Basic Act as reasons for the delay, Yonhap and Korea Times reported.
- Ruling Democratic Party of Korea chief Kim Min-seok had formally asked for another postponement just a day before the minister's announcement, according to Korea Times.
What happened
Speaking in Seoul, Lee said his ministry intends to work with lawmakers to formally postpone the tax, which was originally legislated in 2020 and had been due to take effect in 2022 before three earlier delays, Yonhap reported. He acknowledged the difficulty of asking for yet another extension after so many previous ones, per Yonhap’s account of his remarks.
The timing is notable: the announcement came roughly a month after officials had reaffirmed plans to move forward with the tax as scheduled, and just one day after Kim Min-seok, chairman of the ruling Democratic Party of Korea, publicly called for another delay, according to Korea Times.
Under the rules awaiting implementation, profits from selling or lending digital assets would be treated as miscellaneous income. Gains above an annual threshold of 2.5 million won — about $1,869 to $1,900, depending on the source — would face a combined rate of 22%, covering both national and local income tax, once deductions for acquisition costs and related expenses are applied, per Korea Times and Yonhap.
Why it matters
Repeated delays raise questions about how predictable and credible Korean tax policy is, a concern Korea Times says critics have voiced alongside suspicions of political motives behind the latest reversal. For investors and exchanges, the shifting timeline makes it harder to plan for compliance costs or adjust trading strategies.
The finance ministry frames the delay differently, saying in a statement cited by Yonhap that the goal is to preserve the basic principle that crypto income should eventually be taxed, while improving how both domestic and cross-border transactions are assessed and making the system fairer for taxpayers overall.
Background
A major driver behind the new timeline is an international arrangement: South Korea is set to begin exchanging virtual-asset transaction data with the United States starting in 2029. Officials argued that taxing crypto gains domestically before that information-sharing system is active could leave Korean exchanges and investors at a competitive disadvantage compared with overseas platforms, according to both Korea Times and Yonhap.
The government also pointed to an in-progress Digital Asset Basic Act, which is expected to redefine how digital assets and service providers are classified and regulated. Finalizing that broader framework first, officials said, would make the eventual tax rules more coherent.
What to watch
The finance ministry plans to set up a joint public-private working group to iron out technical details, refine filing procedures, and develop clearer rules for different types of crypto transactions, Yonhap reported. That group is expected to hold its first meeting soon, with discussions continuing through the first half of next year.
Separately, the government is considering letting investors carry forward crypto losses to offset future taxable gains, within a three-year limit — a mechanism similar to practices in the United States and the United Kingdom, according to Yonhap. Legislative amendments covering the delay are expected to go before the National Assembly during its regular 2027 session.
Our read: with tax-sharing deadlines and new regulatory frameworks both tied to 2029, officials are betting that aligning the tax rollout with those milestones will outweigh the political cost of a fourth postponement. Whether lawmakers and the public accept that trade-off may shape how much credibility future tax timelines carry.
Frequently asked questions
When would South Korea's crypto tax now take effect?
The finance ministry wants the levy to begin in 2029 instead of 2027, pending approval from the National Assembly, according to Yonhap.
How much tax would investors pay once it starts?
Annual crypto profits exceeding 2.5 million won (about $1,869–$1,900) would be taxed at 22%, including local income tax, per Korea Times and Yonhap.
Why is the government delaying the tax again?
Officials point to the 2029 start of tax-data sharing with the U.S. and the need to finalize rules under a planned digital asset law, Yonhap reported.
Sources
- The Korea Times: [COVER STORY] Why does Korea keep delaying its crypto tax?
- Yonhap News: (LEAD) S. Korea to seek 2-year delay in tax on cryptocurrency gains
- Yonhap News: S. Korea to seek 2-year delay in tax on cryptocurrency gains
- Yonhap News: (URGENT) S. Korea to seek 2-year delay in taxation of cryptocurrency gains
This article was prepared with AI assistance from the reports listed above and automatically checked against them. See About for how we work.