South Korea's government said on Thursday it will seek to delay taxation of crypto income by two years, from January 2027 to 2029, the fourth postponement of a tax first legislated in 2020. Deputy Prime Minister and Finance Minister Lee Hyoung-il announced the plan at a briefing in Seoul and said the government will work with the National Assembly, The Korea Times reported .
The announcement came a day after Democratic Party of Korea Chairman Kim Min-seok formally asked for another postponement, according to the Korea Times. Lawmakers will have the final say, and the 2029 date is proposed rather than enacted.
Lee gave two main reasons. Starting the tax before crypto transaction information exchange with the United States begins in 2029 could disadvantage the domestic market, and expected changes to asset definitions and service-provider rules under the Digital Asset Basic Act call for more preparation time, according to the Korea Times. Korea expects to begin exchanging crypto-related tax information with the US in 2029 under the OECD's Crypto-Asset Reporting Framework.
The government paired the delay with several measures, Bloomingbit reported :
- A system letting investors carry virtual-asset losses forward and deduct them from gains for up to three years.
- A stronger tax framework for overseas transactions.
- Wider tax-information exchange infrastructure and published detailed tax standards ahead of 2029.
Lee said a joint government and private working group on digital asset taxation will be set up and that the government will speed up work on the Digital Asset Act, and that once trading information can be obtained from the US, there will be enough data to tax investors who use US exchanges.
The announcement ends a period of mixed signals. Blockhead reported in May that the Ministry of Economy and Finance had confirmed January 1, 2027 as the start date , with first filings in May 2028. On October 20, Blockhead covered a ruling-party bill to push the 22% tax to 2029 on the day the ministry met the country's five won-based exchanges. At that point, the government's formal position was that the tax would start on schedule.
The tax applies at 22%, made up of 20% national income tax and 2% local tax, on annual gains above KRW 2.5 million, according to that earlier report. If lawmakers approve the delay, the first filing period would move back accordingly.
The repeated delays have drawn criticism. Seoul Economic Daily reported that critics say the decision again damages the predictability and credibility of tax policy, and The Korea Times framed the announcement as renewing a debate over fairness and readiness after three earlier postponements. Blockhead's May report noted that the earlier delays followed political disagreement and industry concerns over exchange readiness and threshold design.
The tax decision lands as Korean regulators are also reviewing exchange security. Blockhead reported this week that the Financial Services Commission held an emergency meeting with exchanges after the Binance hack , asking them to raise cold-wallet holdings and tighten withdrawal controls. The Bank of Korea has also sent a first survey on crypto-related risks to 18 banks and 13 securities firms, with responses due November 4, Crowdfund Insider reported .
The next steps are the amendment bill and the National Assembly's schedule for it, along with the draft Digital Asset Basic Act. With the ruling Democratic Party backing it, the delay has a clear political route, but the reports do not say when the government will submit the legislation.
