Seoul:South Korea will seek a two-year delay in the implementation of a planned tax on cryptocurrency gains, pushing the start date from 2027 to 2029. This decision considers the timeline for tax information exchanges with the United States and the need to prepare for regulatory changes, as stated by the finance minister.
According to Yonhap News Agency, Finance Minister Lee Hyoung-il discussed the proposal during a press conference in Seoul, mentioning that the government will collaborate with the National Assembly on the delay. Lee expressed regret over another postponement, which follows three previous delays. The government intends to use this period to ensure a smooth implementation of virtual asset taxation by 2029.
The delay is partly due to South Korea's plans to begin exchanging virtual asset information with Washington in 2029. Imposing the tax before this could disadvantage the domestic cryptocurrency market. The Ministry of Finance and Economy emphasized that the postponement aims to improve tax fairness and effectiveness on both domestic and international transactions.
Initially proposed in 2020 for implementation in 2022, the tax would impose a 22 percent levy, including local income tax, on annual cryptocurrency gains exceeding 2.5 million won (approximately US$1,869). The government plans to establish a public-private working group to refine the tax system, develop detailed rules, and ease the filing process for taxpayers.
The working group is expected to convene soon and hold discussions through the first half of the next year. Legislative amendments are planned for submission to the National Assembly during its regular 2027 session. The government will also monitor international developments in tax information sharing and consider allowing investors to carry forward losses up to three years to offset future gains, similar to practices in the U.S. and Britain.
Additionally, the government will cooperate with the Financial Services Commission to expedite the enactment of a digital asset law to foster market growth and user protection. The finance ministry pledged to collaborate closely with the National Assembly to ensure fair application of the tax through updated legislation and enforcement systems.