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South Korea's presidential office backs another crypto tax delay
Ruling-party lawmakers propose moving the 22% gains tax from January 2027 to 2029, citing readiness and overseas reporting gaps.
Key takeaways
- Fourth delay. If approved, the move would be the fourth postponement since the tax was introduced in 2020.
- Overseas data gap. Officials worry domestic-exchange users could be taxed more consistently than investors using foreign platforms, especially before U.S. participation in CARF in 2029.
- Not final. The presidential office's support does not change the law; lawmakers would need to approve an amendment.
What happened
South Korea's presidential office has backed another postponement of the country's cryptocurrency gains tax, according to Crypto.news and U.Today. The levy is due to start on January 1, 2027, but ruling Democratic Party lawmakers have proposed moving it to January 2029. The presidential office's support does not itself change the law; Parliament must approve an amendment before the deadline can move.
Officials cited incomplete government preparations, difficulty obtaining transaction data from overseas platforms and concerns among younger investors. A presidential official, as cited by Crypto.news, said discussion had shifted toward delaying implementation. The report did not provide an estimate of the effect on tax revenue or collection costs.
Both major parties support a postponement but have not agreed on one plan. The Democratic Party has introduced a 2029 bill, while some People Power Party lawmakers have backed a delay, a later date or repeal. Lawmakers could consider amendments in November after government and ruling-party consultations. Until then, the 2027 date remains in law.
Why it matters
A delay would affect investors using domestic platforms such as Upbit and Bithumb, who would otherwise start paying tax on qualifying gains next year. The current framework imposes 22% on annual profits from selling or lending crypto after a 2.5 million won deduction, made up of 20% national income tax and 2% local income tax. An investor with 5 million won in qualifying gains would pay 550,000 won after the deduction.
Officials also point to fairness. If South Korea enforces the tax before international reporting is complete, domestic-exchange users could face more consistent enforcement than investors using foreign services. Industry representatives have warned that uneven reporting could push trading activity offshore. An October industry survey cited in the reports found substantial support for postponement among digital asset businesses and experts, partly for that reason.
What the data shows
The current threshold is 2.5 million won in annual gains, with a combined 22% rate. The delay sequence runs from the 2020 introduction and original 2022 start to postponements for 2023 and 2025 and the present 2027 date. The proposed new start is January 2029. Crypto.news also cited an October 20, 22 Gallup Korea survey showing lower presidential approval among voters in their 20s and 30s, though the survey did not establish that crypto taxation caused it.
The National Tax Service has been preparing to collect the tax under the existing timetable. Officials were scheduled to meet five major exchange representatives on October 20, and questions remain about how to calculate income from staking, airdrops and decentralized finance. Reporting guidelines were expected in November, according to Crypto.news.
Background
South Korea introduced the tax through 2020 amendments to its Income Tax Act, initially for January 2022. Lawmakers postponed it to 2023, then 2025 and finally January 2027. Another delay would be the fourth. The presidential office's stance is a shift from August, when the government kept the 2027 deadline in its tax reform plans, as Crypto.news reported.
The OECD's Crypto-Asset Reporting Framework, or CARF, is meant to let participating countries exchange information on crypto transactions and account holders. South Korea expects to begin exchanging information internationally in 2027, but the presidential office has cited the United States' planned participation from 2029. U.Today reported that Democratic Party lawmaker Park Min-kyu proposed tying implementation to two years after the first CARF exchange.
What to watch
The main uncertainty is parliamentary approval. The Democratic Party has proposed 2029, but opposition lawmakers have floated a later deadline or repeal, so the final amendment is unresolved. The presidential office is expected to consult the government and ruling party after October's parliamentary audit. Democratic Party leader Kim Min-seok previously said the issue needed to be settled this year, according to the translated report cited by Crypto.news. The January 1, 2027 date remains in law until Parliament acts.
Questions readers ask
When would South Korea's crypto tax start?
It remains legally set for January 1, 2027. Ruling-party lawmakers have proposed January 2029, but Parliament has not approved the change.
Why is a delay being considered?
Officials cite incomplete preparations, difficulty obtaining overseas exchange data and fairness concerns. The U.S. is not due to participate in CARF until 2029.
Which crypto gains would be taxed?
Under the current framework, a 22% rate would apply to annual profits from selling or lending crypto after a 2.5 million won deduction, including 20% national and 2% local income tax.
