South Korea's Ruling Party Files Bill to Delay Crypto Tax to 2029

First Deferral Bill From the Ruling Party

A ruling-party lawmaker moved on Thursday to push back South Korea's virtual asset income tax by two years. Representative Park Min-kyu of the Democratic Party filed a partial amendment to the Income Tax Act on 15 October that resets the tax's start date to 1 January of the second year after countries first exchange crypto trading data with each other. Because the OECD's Crypto-Asset Reporting Framework (CARF), the automatic system for sharing cross-border crypto data, is slated to run its first exchanges in 2027, the bill would in practice move taxation from 2027 to 2029. The amendment's stated rationale is that Korea has not yet secured trading data or built the tax infrastructure a credible levy requires: starting before the OECD system works would weaken tax effectiveness and reduce predictability for taxpayers. The text also flags an equity problem: transactions on foreign venues such as those in the United States, and balances kept in a crypto wallet outside Korean exchanges, cannot be traced until the information-sharing regime runs. Park's amendment argues that the Digital Asset Basic Act, the framework law that would set base rules for the wider Web3 market, should be in place before taxation begins.

How the 2029 Date Works

The filing marks the first time the Democratic Party itself has put a deferral bill on the table. According to DigitalAsset, no digital asset tax legislation had been proposed from inside the party since the second postponement in February 2024, and the party has yet to settle an official position: members remain split between a camp that wants the tax to take effect on schedule in 2027 and one demanding another delay. The amendment itself is technically narrow. It rewrites the effective-date clause so that taxation begins on 1 January of the second year after crypto trading information is first exchanged under the International Tax Adjustment Act, Korea's framework for cross-border tax cooperation. Consequential changes move the reference date used for calculating acquisition cost, along with the effective dates and application examples of related provisions. That structure makes the delay automatic rather than calendar-fixed: if the first CARF exchange slips, the Korean start date slips with it, which supporters read as tying the tax to verifiable data rather than to politics.

Opposition Bills and Government Preparation

Deferral is not a ruling-party-only cause. The opposition People Power Party had already moved three bills before Thursday: Representative Song Eon-seok proposed deleting the virtual asset income taxation provision outright, while Representatives Kim Sang-hoon and Jung Sung-kuk each submitted amendments that postpone the start. The government has kept to the existing timetable in its preparations while leaving the door open. Deputy Prime Minister and Finance Minister Lee Hyung-il said at the National Assembly audit on 6 October that he would listen broadly to the Assembly, experts and industry. Former National Tax Service Commissioner Im Kwang-hyun told the same audit on 13 October that the notice specifying crypto taxation criteria would be finalized in consultation with the finance ministry and announced next month. A separate prerequisite is slipping too: in a written answer dated 15 October, the Financial Services Commission said the Digital Asset Basic Act needs more time for interagency consultation and expert input. Park responded that the government has not disclosed a bill submission schedule or its stance on core issues such as a cap on exchange major shareholders' stakes, and questioned whether the law can pass this year.

Data Access Is the Binding Constraint

Our reading is that the two-year delay now has backing on both sides of the aisle, which makes a 2027 start improbable unless the government spends political capital it has so far declined to spend. The binding constraint in the bill is data, not ideology: Korea can verify income earned on domestic exchanges today, but not activity abroad until CARF exchange begins, and the text anchors the timeline to the United States' 2029 participation. Two threads follow. Whether the Basic Act and the tax move together will decide the sequencing argument, since the bill makes taxation conditional on that framework law. And the current text leaves uncovered the income that sits outside exchange reporting altogether, from DeFi activity to holdings kept on a hardware wallet, both of which generate no exchange-submitted data for the tax authorities to read.