South Korea's Ruling Party Seeks Fourth Delay to Crypto Tax Until 2029
South Korea's ruling Democratic Party is seeking another two-year postponement of its cryptocurrency gains tax, potentially pushing implementation from January 2027 to 2029. The proposal would mark the fourth delay since the tax was originally scheduled to take effect in 2022.
Democratic lawmakers serving on the National Assembly's Strategy and Finance Committee agreed on November 3 to recommend the postponement to the party leadership, according to local media reports. The proposal reflects concerns over tax preparation, international information sharing and the country's evolving digital asset regulatory framework.
Oh Gi-hyoung, the party's secretary on the committee, said lawmakers generally supported the principle that income should be taxed where it is generated but believed additional preparation time was necessary under current policy conditions.
"While we agree with the basic tax principle that income should be taxed where it arises, the majority view was that, given various policy circumstances, it would be unavoidable to allow a period of preparation before implementation," Oh said. "Most people seem to be talking about around two years."
International Crypto Tax Reporting Raises Timing Concerns
One factor behind the proposed delay is the timing of an international framework for exchanging cryptocurrency tax information, which is expected to begin involving South Korea in 2029.
The report did not identify the system by name. However, it could refer to the OECD's Crypto-Asset Reporting Framework, which was approved in 2022 and finalized for global rollout in 2023.
Under the phased implementation schedule, dozens of early-adopter countries began collecting relevant data in 2026 for information exchanges in 2027. The United States, however, is not scheduled to join the system until 2029.
South Korean lawmakers want additional time to assess how international reporting arrangements will work before introducing domestic taxation on crypto gains.
Digital Asset Basic Act Also Factors Into Proposed Delay
The second consideration is the proposed General Act on Digital Assets, also referred to by policymakers as the Digital Asset Framework Act or Basic Act.
Oh said the legislation could be introduced in the first half of 2027. The ruling party appears to favor allowing the broader digital asset regulatory framework to develop before the tax takes effect.
Lawmakers also want to test how cryptocurrency tax information can be shared between the National Tax Service and domestic exchanges. The party plans to conduct tax simulations using actual transaction data to assess how the system would operate in practice.
The proposed postponement is expected to be included in discussions on amendments to the Income Tax Act at a future meeting of the National Assembly's Tax subcommittee.
South Korea's Current Crypto Tax Framework
Under the existing law, cryptocurrency profits exceeding 2.5 million won would be subject to a 20% tax beginning January 1, 2027, alongside a 2% local levy.
The tax was initially scheduled for implementation in 2022 but has already been postponed three times, according to The Korea Times. If the latest proposal is approved, the planned 2027 start would be delayed by approximately another two years.
The proposal also comes amid differing positions among policymakers and industry representatives. Finance Minister Lee Hyoung-il has supported implementing the tax on schedule, while the Digital Asset eXchange Alliance (DAXA), an industry group representing cryptocurrency exchanges, has called for another postponement.
No final implementation change has been confirmed. The January 2027 date remains the schedule under current law unless lawmakers approve the necessary legislative amendments.
source: coindesk
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
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