South Korea weighs fourth crypto tax delay to 2029

South Korea’s presidential office said Sunday it was considering another delay to the country’s 22% crypto gains tax, now scheduled for January 2027, with 2029 under discussion, according to The Herald Business. No decision has been made, and the proposal would require a change to the law.

• Current start date: Jan. 1, 2027
• Tax rate: 22%, including local income tax
• Annual basic deduction: 2.5 million won
• Possible new start date: 2029

The levy would apply to annual gains from transferring or lending crypto, after acquisition costs and other necessary expenses are deducted. It was first scheduled for 2022 and has been delayed three times. Another postponement would be the fourth.

Why is the US data-sharing timeline part of the debate?

South Korea is due to begin exchanging crypto transaction information with other jurisdictions in 2027 under the OECD’s Crypto-Asset Reporting Framework, or CARF. The United States is scheduled to join in 2029, according to The Herald Business.

CARF is a system for tax authorities to automatically exchange information about crypto transactions across borders. Officials and lawmakers cited the gap in US data as a concern: without it, tax authorities may have difficulty tracking overseas activity while domestic exchange users face the levy. The concern is that enforcement could fall more heavily on people trading through South Korean platforms.

The 2029 date also appears in a bill introduced on Oct. 16 by Democratic Party lawmaker Park Min-gyu and 13 colleagues. As reported by The Herald Business, the bill would start the tax two years after the first year of cross-border crypto data exchange. If that first exchange takes place in 2027 as expected, the formula points to a 2029 start.

What would the tax cover if it starts as scheduled?

The existing plan applies a combined 22% rate to annual crypto gains above 2.5 million won. That rate includes 20% income tax and local income tax. The rules cover income from transferring or lending virtual assets, with acquisition costs and other necessary expenses deducted before calculating the taxable gain.

The tax was written into South Korea’s Income Tax Act in 2020, but its start date has moved from 2022 to 2027. The previous delays followed concerns about tax infrastructure and investor protection, according to The Herald Business.

When will South Korea decide?

The government and ruling party are expected to consult on whether to delay the tax again. The Herald Business reported that a final position and any specific start date are expected during National Assembly deliberations on income tax changes, with a conclusion anticipated in late November or early December.

For now, the law still sets Jan. 1, 2027 as the start date. The Block’s report on the proposal likewise says the presidential office is discussing a delay and that lawmakers would need to revise tax law for a new date to take effect.

Sources and documents

• The Herald Business — mbiz.heraldcorp.com
• report on the proposal — theblock.co