Officials are concerned users of domestic exchanges would bear the tax burden because the U.S. won’t share crypto trading data until 2029.
- South Korea is leaning toward delaying its crypto gains tax, due to start in January, until 2029, in what would be a fourth postponement.
- Officials are concerned users of domestic exchanges would bear the tax burden because the U.S. won’t start sharing crypto trading data until 2029.
- Parliament must approve an amendment to the law, with a final decision expected by early December.
South Korea is considering delaying its tax on cryptocurrency gains for a fourth time, postponing the introduction until 2029, Newsis reported.
The presidential office is leaning toward a delay amid concerns that the tax burden would fall largely on users of South Korea-based exchanges because authorities would struggle to track activity on U.S. platforms, the report said, citing unidentified officials.
“Almost half of the crypto market is the U.S.,” an official told the news outlet, calling the lack of U.S. tax data the biggest obstacle.
The discussions signal a shift from the government's stance in July, when Deputy Prime Minister Koo Yun-cheol told lawmakers that the tax would take effect in January 2027. Koo has since been replaced by Lee Hyung-il, who told lawmakers at an Oct. 6 parliamentary audit that he would gather views from parliament, experts and industry.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 will be taxed at 20%, or 22% including local income tax, after a 2.5 million won ($1,887) deduction. The National Tax Service still lists Jan. 1, 2027 as the start date.
The concern stems from differences in when countries will begin sharing crypto trading data under the OECD's Crypto-Asset Reporting Framework (CARF).
South Korea, Japan and the U.K. are due to begin exchanging data in 2027. Singapore, Switzerland and Hong Kong are set to follow in 2028, while the U.S. will not start until 2029, according to the OECD's timetable.
The U.S., U.K. and Japan already tax crypto without waiting for cross-border data exchanges. The South Korean government had previously argued it could track offshore holdings through foreign financial account reporting.
Ruling Democratic Party lawmaker Park Min-kyu has proposed moving the tax's start date to Jan. 1, 2029, according to local media. The levy was first scheduled for 2022. A fourth delay would require parliament to change the law.
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