Taxation is one of the critical factors that influence the decision to invest.
For instance, if an investor realizes a profit of $10,000 from crypto trading, a 22% tax would leave them with $7,800 before additional fees and taxes. Now, if another market has more tax-friendly conditions, the investor will likely choose the second option. Thus, this is how taxation affects investment decisions.
Naturally, it shifts focus to the current tax situation in South Korea related to crypto. The nation is preparing to impose a 22% tax on crypto profits in January 2027.
However, top crypto exchanges have requested another postponement. According to the recent Yonhap News Agency report:
Standards for different transaction types have not yet been finalized, and time is running short for practical preparations on the infrastructure side. There is a shared view in favor of postponing the start of taxation.
The key takeaway? The government is now set to meet exchange executives to discuss the issue, with a new proposal potentially pushing the rollout to 2029.
On Friday, Democratic Party of Korea lawmaker Park Min-gyu introduced a bill seeking to defer the tax until Jan. 1 of the second year after South Korea begins sharing data under OECD’s Crypto-Asset Reporting Framework (CARF). With the first exchange expected in 2027, taxation would begin in 2029.
Could South Korea’s crypto tax push capital offshore?
South Korea’s decision is significant because it is a major crypto trading center.
According to Yonhap, South Korea’s five major crypto exchanges had a daily average of 597.8 billion won ($406.5 million) in trading volume in July 2026, with Upbit and Bithumb accounting for over 90% of the domestic exchange volume.
In this regard, a survey of 30 industry experts by the Seoul Economic Daily reveals that 93.3% would like to postpone the new tax, and 86.7% believe that trading volumes on major exchanges will decline if the tax is implemented as proposed.
Plainly speaking, the new tax is not just a change in the tax code but a hot-button issue with broad consequences, as Park Sung-jae, an analyst at Shinhan Securities, noted:
Investments are being shifted to overseas exchanges, like Binance, as the foreign crypto exchanges offer a variety of investment formats, such as futures and leverage, with spot trading being the only de facto trading option here.
In this context, a delay until 2029 would provide crypto exchanges with much-needed relief.
However, a postponement is still only a “proposal.” So, if the tax goes into effect in 2027, as proposed, increased compliance costs may dampen trading activity and capital inflows, while additional postponements would cause uncertainty for the industry.
Either way, the outcome could impact sentiment and capital flows in one of Asia’s key crypto markets.
Final Summary
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South Korea’s 22% crypto tax could be delayed from 2027 to 2029.
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The decision could affect trading volumes, investor sentiment, and capital flows.
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