South Korea's Presidential Office Weighs Fourth Crypto Tax Delay to 2029

Presidential Office Leans Toward Delay

South Korea's presidential office is weighing a fourth postponement of the country's tax on cryptocurrency gains, a delay that would move the levy from January 1, 2027 to 2029. The review has emerged through inter-agency talks described by officials this weekend, and it turns on a single problem: Korean authorities cannot reliably trace trading on United States platforms. One official told local media that “almost half of the crypto market is the U.S.,” calling the lack of American tax data the biggest obstacle to enforcement. Washington will not begin exchanging crypto transaction records under the OECD's Crypto-Asset Reporting Framework (CARF), the standard through which national tax offices swap digital-asset trading data, until 2029. South Korea, Japan and the U.K. are due to start exchanging data in 2027, with Singapore, Switzerland and Hong Kong following in 2028, according to the OECD's published commitment timetable. The sequencing matters because the burden would otherwise fall heavily on users of domestic crypto exchanges: without U.S. data, the National Tax Service would have to pursue offshore transactions one by one, while spot trading on foreign platforms or in self-custody would largely escape review. Seoul had previously argued that foreign financial account reporting would be enough to reach offshore holdings. As recently as July, Deputy Prime Minister Koo Yun-cheol told lawmakers the tax would take effect in January 2027; he has since been replaced by Lee Hyung-il, who said at an October 6 parliamentary audit that he would gather views from parliament, experts and industry. Under the current rules, annual net income from crypto transfers or lending above a 2.5 million won (about $1,887) deduction is taxed at 20%, or 22% including local income tax. The National Tax Service still lists January 1, 2027 as the start date on its official notice.

Bills, Petitions and Industry Pressure

The legislative track is already moving. On October 16, ruling Democratic Party lawmaker Park Min-kyu and 13 colleagues filed a bill that would move the tax's start date to January 1 of the second year after the first international data exchange under CARF, which works out to 2029. People Power Party lawmaker Song Eon-seok filed a separate bill to strike the crypto tax provisions from the law entirely. Industry has lined up behind the later date: the Korea Digital Asset Business Association backed 2029 on Thursday and urged the government to pass a digital asset law with stock-market-grade investor protections before any tax takes effect. Public pressure followed the same path. Last week, two petitions, one demanding repeal and one asking for a two-year deferral, each cleared the 50,000 signatures that force a legislative review. Democratic Party leader Kim Min-seok called for a “thorough final review,” a shift for a party that had defended the 2027 timeline. At a parliamentary audit on Thursday, Finance Minister Lee Hyeong-il said the government would decide “after carefully considering and gathering all opinions from the industry and the National Assembly,” and Financial Services Commission chairman Lee Eog-weon said the tax should “take various circumstances into full consideration.” The levy dates to a 2020 amendment to the Income Tax Act and has already been postponed three times, from 2022 to 2023, then 2025, then 2027, as officials conceded that tax systems and investor protections were not ready. The Virtual Asset User Protection Act took effect in July 2024, but the Digital Asset Basic Act, a licensing framework flagged alongside possible spot ETF approval, has not passed. The National Tax Service, meanwhile, has not paused its own work: it plans to publish a draft notice on taxable crypto income by the end of October. A final decision is expected through National Assembly tax revisions between late November and early December.

Our reading is that the dispute is about data parity, not about whether virtual asset gains should be taxed at all. The CARF timetable makes the case almost by arithmetic: a Korean resident trading on a U.S. platform will be invisible to Seoul until 2029, so taxing domestic traders first would create the two-tier burden officials themselves describe as unfair. The U.S., U.K. and Japan already tax crypto without waiting for cross-border data, relying on domestic broker obligations of the kind codified in Coinbase tax reporting rules, so Seoul has a workable precedent if it chooses to proceed on schedule. With the National Tax Service still drafting its taxable-income notice and audits wrapping up, the practical answer arrives within weeks, not months.