South Korea Weighs Crypto Tax Delay

• South Korean officials will meet five major crypto exchanges on October 20 to discuss tax readiness.
• A proposed bill could delay the 22% crypto tax until 2029, pending international data sharing.
• South Korea’s crypto tax remains scheduled for January 2027 as authorities prepare implementation guidelines.

South Korea is reconsidering its planned cryptocurrency tax as industry concerns grow ahead of the January 2027 launch. Senior finance officials will meet representatives of five major exchanges on October 20 to discuss implementation challenges and calls for another postponement.

South Korea Consults Exchanges on Crypto Tax Readiness

According to a report by Yonhap, South Korean officials will meet representatives from Upbit, Bithumb, Coinone, DigitalX and Gopax on October 20 to discuss the planned crypto tax.  Digital Asset Exchange Alliance (DAXA) executives will also attend, alongside senior finance officials, as industry concerns over unclear tax rules and limited preparation time fuel calls for another delay. 

The consultation follows Finance Minister Lee Hyoung-il’s October 6 parliamentary statement that the government would gather opinions from affected stakeholders. Authorities are reviewing industry concerns while continuing preparations for the existing implementation schedule.

South Korea introduced its cryptocurrency income tax framework through amendments to the Income Tax Act in 2020. However, lawmakers have postponed implementation three times, with January 1, 2027, remaining the current start date.

Under the existing framework, qualifying annual income from cryptocurrency transfers and lending faces a combined 22% tax. The calculation includes a basic annual deduction of 2.5 million won, with the rate comprising national income tax and local income tax.

Exchange representatives argue that unresolved rules and limited preparation time could complicate implementation. They have highlighted uncertainties involving staking rewards, airdrops, hard forks and decentralized finance transactions.

These activities create questions about how taxable income should be classified and calculated. Exchanges also face challenges involving transaction reporting, investor holdings and incomplete records from overseas platforms.

New Bill Could Push Crypto Taxation Toward 2029

The debate intensified after Democratic Party lawmaker Park Min-gyu introduced an amendment to the Income Tax Act on October 16. The proposal would link cryptocurrency taxation to the introduction of international crypto transaction-data sharing under the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework (CARF).

Under the proposed formula, taxation would begin on January 1 of the second year after the relevant information exchange first occurs. If qualifying data sharing starts in 2027, implementation could move to January 1, 2029.

The bill aims to address concerns that domestic exchange users could face different treatment from investors using overseas platforms. However, the proposal still requires legislative approval, leaving the existing January 2027 deadline unchanged.

Meanwhile, South Korea’s National Tax Service continues preparing implementation guidance, which officials expect around November. Lawmakers have instructed authorities to maintain preparations unless the National Assembly formally approves another delay.

The government is also advancing work on a proposed Digital Asset Basic Act covering broader industry regulation. Discussions include potential ownership limits for major exchange shareholders and requirements for won-denominated stablecoin issuers.

The October 20 consultation could clarify whether industry concerns will influence the government’s next steps. Until lawmakers change the existing framework, South Korea’s planned cryptocurrency tax remains scheduled to begin in January 2027.