South Korea Delays Digital Asset Tax by 2 Years to 2029

Digital Asset Tax Pushed to 2029

South Korea's government will seek a two-year delay of its digital asset income tax, moving the planned start from January 1, 2027 to January 1, 2029. Deputy Prime Minister and Finance Minister Lee Hyeong-il announced the plan at a briefing held at the Seoul Government Complex on Thursday, saying the postponement will be pursued in consultation with the National Assembly. The deferral reflects the high price volatility of digital assets, the need to reflect actual investment outcomes in taxation, and the institutional changes expected from the pending Digital Asset Basic Act. Lee also acknowledged the weight of the decision, noting the tax has already been postponed three times and that this would be a fourth delay.

Three-Year Loss Carryforward

The core institutional change is a loss carryforward deduction, which currently does not apply because digital asset income is classified as other income. Under the proposal, losses incurred after the 2029 launch can be deducted from profits over the following three years: a loss recorded in 2029 offsets gains from 2030 through 2032, and a 2030 loss carries through 2033. Tax policy chief Jo Man-hee said the carryforward is permanent, not a three-year trial. Deductions follow a fixed order: the 2.5 million won annual basic deduction applies first, then prior-year losses offset what remains. A taxpayer with a 10 million won loss in 2029 and 6 million won of profit in 2030 would deduct 3.5 million won that year, with the remaining 6.5 million won usable through 2032.

Deemed Acquisition Price Rules

Assets bought before the tax takes effect will use a deemed acquisition price, set at the higher of the December 31, 2028 market value or the investor's actual purchase cost. An investor who bought in 2026 or 2027 at a higher price can apply that cost instead, preserving the loss calculation. Two limits apply. Losses already locked in by selling before the 2029 launch cannot be carried forward, and investors cannot choose which year to claim a deduction: when a taxable profit appears, prior losses are subtracted automatically at that year's May filing rather than deferred to a more favorable year. Jo said the other income classification stays in place because it handles mixed transaction types, spanning transfers and lending income, more simply than a capital gains framework.

Why the Date Moved to 2029

The government anchored the delay to the Crypto-Asset Reporting Framework, the automatic information exchange regime it will operate with the United States starting in 2029. Taxing before overseas transaction data becomes available would create an equity gap between users of domestic exchanges and users of foreign platforms, officials argued. During the two-year window the finance ministry plans to expand systems that link overseas tax data with domestic records and to finalize detailed tax standards across transaction types by the first half of 2028. Lee noted that major jurisdictions including the United States and the United Kingdom already allow loss carryforward, and that expert proposals supported taxing net results over a period rather than single-year gains.

Working Group and Legislative Timeline

Implementation runs through a joint public-private working group on digital asset taxation, staffed by experts, industry representatives and relevant ministries, covering tax system improvements, transaction-specific standards and taxpayer filing support. Institutional improvement plans are due by the first half of 2027, with amendment bills submitted to that year's regular National Assembly session, while detailed standards are published in the first half of 2028. The deferral and the carryforward are both intended to pass in the current regular session. Separately, the Financial Services Commission is drafting the Digital Asset Basic Act as an integrated law covering operators, markets and users, with stablecoin rules at its core. The working group will also examine stablecoin and perpetual futures taxation, with futures treatment depending on how the commission classifies the instruments.

A Fourth Postponement

COINOTAG's reading is that 2029 is the firmest date yet because it ties taxation to an external, treaty-based milestone, the CARF exchange with the United States, rather than domestic readiness alone. The carryforward moves Korea's framework closer to United States and United Kingdom practice and addresses the sharpest criticism of taxing annual gains in a volatile market. The package still requires National Assembly passage this session, and the rules mean many long-term holders face a reset of their tax baseline at December 31, 2028 prices, with pre-2029 realized losses excluded. The carryforward bill in the current session and the 2028 standards publication are the next concrete checkpoints.