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ZEC $1,166 South Korea to meet crypto exchanges amid calls for tax delay
Finance officials and five exchanges are set to discuss a planned 22% crypto income tax before its January 2027 start.
Key takeaways
- Three delays so far. Lawmakers have postponed the crypto tax three times, with the latest delay setting the start date at 2027.
- A 22% rate. The framework applies a combined 22% tax to qualifying annual crypto income above a 2.5 million won deduction.
- A possible 2029 start. A new bill would tie taxation to data sharing under CARF, which the report says could mean a 2029 start.
What happened
South Korea's senior finance officials are reportedly set to meet crypto exchanges on Tuesday as calls grow to postpone a planned cryptocurrency tax. Yonhap reported that the government plans a consultation on crypto taxation. Representatives from Upbit, Bithumb, Coinone, DigitalX and Gopax are expected, along with executives of the Digital Asset Exchange Alliance, known as DAXA.
Government officials attending include Kwon Dae-young, first vice minister of finance and economy, and Yoo Young-jun, director general for digital financial policy at the Financial Services Commission. On Friday, Democratic Party of Korea lawmaker Park Min-gyu introduced a bill seeking to postpone the tax until Jan. 1 of the second year after South Korea begins sharing data under the OECD's Crypto-Asset Reporting Framework. With the first exchange expected in 2027, taxation would begin in 2029.
An exchange official told Yonhap that standards for different transaction types have not been finalized and that time is short for infrastructure preparations. The official said there is a shared view in favor of postponing the start of taxation.
Why it matters
The meeting comes before a scheduled January 2027 start. South Korean regulators have delayed the crypto tax three times, with the latest delay pushing the start date to 2027 amid political disagreement and industry pushback over exchange readiness and the threshold level.
Under the current framework, a combined 22% tax applies to qualifying annual crypto income above exemptions. Investors receive an annual basic deduction of 2.5 million won, with the combined 22% tax applying to qualifying income above that allowance. The rate consists of a 20% national income tax and an additional local income tax.
Exchanges say unresolved rules for staking, airdrops and DeFi complicate preparations. Tax authorities are preparing November guidelines while lawmakers consider another postponement before January's implementation deadline. The government has not announced another postponement.
What is still unclear
- It is not yet clear whether lawmakers will pass the new bill or whether the January 2027 start will hold. The government has not announced another postponement.
- Exchange representatives say standards for several transaction types have not been finalized, leaving limited time to prepare reporting systems.
Questions readers ask
When does South Korea's crypto tax start?
The current schedule sets the start at January 1, 2027. Lawmakers have postponed the tax three times, and a new bill could push the start toward 2029.
What is South Korea's crypto tax rate?
The framework imposes a combined 22% tax on qualifying annual crypto income above exemptions. Investors receive an annual basic deduction of 2.5 million won.
Which exchanges will meet South Korean officials?
Representatives from Upbit, Bithumb, Coinone, DigitalX and Gopax are expected, along with executives of the Digital Asset Exchange Alliance, known as DAXA.
Who introduced the new crypto tax delay bill?
Democratic Party of Korea lawmaker Park Min-gyu introduced the bill on Friday. It seeks to postpone the tax until Jan. 1 of the second year after South Korea begins sharing data under CARF.
