South Korea ruling party pushes fourth crypto tax delay to 2029

What happened

South Korea's ruling Democratic Party is pushing another postponement of the country's cryptocurrency income tax, with a two-year delay to 2029 favored. The tax is set by law to start on Jan. 1, 2027. Another deferral would be the fourth since the framework was approved in 2020.

The move followed a Nov. 3 meeting of the National Assembly's Finance, Economy and Planning Committee, where Democratic Party members reached a decision after closed-door talks with government officials, Seoul Economic Daily reported, according to Crypto.news. Lawmakers cited gaps in overseas transaction reporting, unfinished digital asset legislation and exchange readiness. Democratic Party lawmaker Oh Ki-hyung, the party's secretary on the committee, said members still support taxing crypto income but believe more preparation is needed.

The recommendation goes to party leadership and its policy committee, which Crypto.news reported is expected to review it within one to two weeks. Most committee members favored a delay of about two years, but the proposal is not final, and the 2027 date remains in place unless parliament changes the law. Blockonomi reported that party leader Kim Min-seok formally proposed the delay at a supreme council meeting, citing News1. Kim said the Digital Asset Basic Act should pass first and that companies and investors need time to adjust.

Kim listed overseas transaction information, verification of tax IT systems and taxpayer guidance as work to complete during a deferral, according to Blockonomi. He said the party would set a clear period this time. The government has not announced final approval.

Why it matters

The tax would apply at 22%, including local tax, to annual gains above 2.5 million won, or about $1,868.7, from selling or lending crypto assets. A delay would postpone reporting and payment obligations and prolong uncertainty over how pre-existing holdings are valued. A recent cost-basis analysis referenced by Crypto.news said the rules use the higher of the original acquisition cost or the prescribed market value at the start of taxation for assets acquired before implementation. Tax Commissioner Lim Gwang-hyeon said at an Oct. 13 hearing that the National Tax Service was working with exchanges and officials to clarify treatment.

The timing is tied to international data sharing. South Korea is due to begin exchanging information under the OECD's Crypto-Asset Reporting Framework in 2027, while the United States is expected to join in 2029. Lawmakers say that gap matters because enforcement depends on overseas records. Domestic exchanges face a related problem: when investors transfer assets from foreign platforms, local operators may see the assets but not their original purchase prices, making gains hard to calculate. The National Tax Service has said incomplete overseas records do not necessarily block taxation and that foreign account information and CARF data could help.

What the data shows

Key figures include the 22% rate including local tax and the 2.5 million won threshold. The current start date is Jan. 1, 2027; the favored delay would move it to 2029. South Korea is scheduled to begin CARF exchanges in 2027, while the U.S. is expected to start in 2029. Park Min-gyu's Oct. 16 bill would tie implementation to Jan. 1 of the second year after the first qualifying CARF exchange of crypto transaction data.

Background

South Korea approved its crypto income tax framework in 2020, with implementation first set for January 2022. The start has since been postponed three times, leaving Jan. 1, 2027 as the current date. Some lawmakers want to proceed on schedule, while others favor more preparation time. The presidential office has previously backed another postponement, and opposition People Power Party lawmakers have proposed either a further delay or repeal, according to Crypto.news.

The Digital Asset Basic Act, intended to set broad rules for crypto businesses and transactions, was in the final stages of government consultations in October but had no announced introduction date, Crypto.news reported. Oh said business classifications and transaction rules could affect how crypto income is taxed. Bithumb estimated that developing and testing its reporting infrastructure could take six to nine months after authorities provide a suitable testing environment, according to materials submitted to lawmakers.

What is still unclear

It is not yet clear whether Democratic Party leadership will endorse the recommendation, what final deferral period it will choose or whether parliament will approve a change. The Digital Asset Basic Act's final contents and introduction schedule have not been announced, leaving its effect on the tax framework unsettled. The National Tax Service has maintained that missing foreign records do not by themselves prevent taxation. The government has not confirmed a delay.

What to watch

Party leadership and the policy committee are expected to review the recommendation in the coming weeks, according to Crypto.news. Any formal change would then require parliamentary action. Also worth watching are the Digital Asset Basic Act's introduction, the government's position on the 2029 timeline and progress toward CARF exchanges. Exchange preparations and taxpayer guidance could shape readiness if the current date is retained.

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