South Korea Proposes Delaying Crypto Gains Tax Until 2029

A fourth delay puts the tax back on the legislative calendar

South Korea’s proposed crypto tax now hinges on a 2029 start, giving the government time to build out transaction reporting and revise how investors account for losses. The change, announced November 5, would move the planned launch from January 2027 and needs National Assembly approval. For investors, the immediate effect is uncertainty about timing: the government has named a new target, but the law hasn’t been amended.

The tax has been postponed three times since its introduction in 2020. Finance and Economy Minister Lee Hyeong-il said the government will work with lawmakers to amend the existing tax law, making this the fourth proposed delay. That record matters. Each postponement has kept the policy from taking effect while leaving the basic question—how to tax gains from virtual assets—on the agenda.

Here’s the thing: a later start may give officials more time to make the system workable, but repeated delays also make it harder for investors and businesses to plan around a settled timetable. The proposal is now tied to practical preparations as well as legislative approval.

Reporting gaps shape the revised timetable

Under the current framework, individuals would pay a 20% national income tax and a 2% local tax on annual crypto gains above 2.5 million won, or about $1,869. The rules cover income from transferring or lending virtual assets. That threshold and rate establish the proposed tax’s basic shape, though the way gains are identified and calculated will matter just as much to anyone filing a return.

The government says starting before it can obtain international transaction data could disadvantage South Korean investors and domestic exchanges. South Korea is scheduled to begin exchanging crypto-asset tax information with the United States in 2029 through the OECD-backed Crypto-Asset Reporting Framework, which is intended to help identify overseas activity and calculate taxable income. The planned exchange addresses a familiar problem for tax systems: activity spread across borders can be difficult to reconcile using domestic records alone.

Similar reporting systems typically depend on consistent information from different jurisdictions and usable records of transactions. That won’t, by itself, settle every question about an investor’s taxable position, but the government’s timetable suggests it views access to international data as part of the operating foundation. This is more significant than it looks: setting a tax rate is straightforward compared with building a process that can reliably identify gains across platforms and borders.

The ministry also cited the need for more time to prepare its digital asset regulatory framework. Its proposed timetable includes a public-private working group of industry representatives, experts and officials to review tax rules, reporting requirements and filing procedures. The group is expected to work through the first half of 2027. The government plans to submit legislative amendments during the National Assembly’s regular session that year and issue detailed tax guidance in the first half of 2028.

That sequence gives the government time to hear from the people expected to report, calculate and administer the tax. It also leaves a long stretch between the working group’s review and the planned start, during which lawmakers must still approve amendments and officials must clarify filing details. If you're working in this space, the dates are useful planning signals, but they aren’t a guarantee that the proposed schedule will hold.

Losses could carry forward for three years

A separate proposed change would let investors apply eligible crypto losses against gains in later tax years for up to three years. Current rules allow gains and losses to offset each other within the same year, but unused losses cannot be carried forward. The proposed change would give investors a longer window to account for the uneven pattern of gains and losses that can arise across successive years.

That adjustment would change how investors manage taxable gains across multiple years, while the reporting framework would address a key obstacle to calculating them. A loss carry-forward rule also makes recordkeeping more consequential: investors would need to preserve enough information to show when a loss arose and how it was applied later. (And this is the part most people overlook.) The practical value of the rule would depend on the final definitions and filing procedures, which haven’t yet been set out here.

Both measures remain proposals: the National Assembly must approve the required amendments before the January 2029 start becomes law. The delay gives South Korea more time to align tax rules with reporting arrangements and to spell out how losses work across tax years. A target date, though, is only a target. The next test is whether the promised legislative and administrative work produces rules investors can actually follow.