South Korea weighs fourth delay on its crypto gains tax, pushing it to 2029

South Korea is considering moving its cryptocurrency gains tax from January 2027 to January 2029. This would be the fourth delay. The central issue is whether tax authorities can measure residents’ complete crypto activity, including trades made through overseas platforms.

Officials are especially concerned about U.S. exchanges. An official said almost half of the crypto market is connected to the United States, while the U.S. will not begin sharing crypto trading data under the OECD framework until 2029. Without that information, authorities may see domestic activity but miss offshore transactions and profits.

The presidential office is reportedly leaning toward postponement. Ruling Democratic Party lawmaker Park Min-kyu has proposed a January 1, 2029 start date. Parliament must amend the law, and a final decision is expected by early December. The National Tax Service still lists January 1, 2027 as the start date.

A cryptocurrency gains tax applies to net profit from crypto transfers or lending during a year. It targets gains after allowable losses are considered, not simply the total value of trades. The tax matters because it turns crypto profits into taxable income under South Korea’s rules.

Under the current plan, annual net crypto income above a 2.5 million won deduction would face a 20% national tax. Local income tax would raise the combined rate to 22%. For example, if a person’s annual net gain is 5 million won, the taxable amount after the deduction would be 2.5 million won, before applying the rate.

The planned start date is January 1, 2027, although the government may move it to 2029. The National Tax Service still lists the 2027 date, and Parliament must change the law for another delay.

South Korea’s proposed crypto tax includes a yearly deduction of 2.5 million won, equal to $1,887 in the article. Only annual net income above that threshold would be subject to the proposed tax. This allowance reduces the taxable amount for smaller gains but does not remove reporting challenges.

The scale problem is international. An official told Newsis that almost half of the crypto market is the U.S. market. South Korean authorities therefore need reliable information about trading on U.S. platforms to compare gains, losses, and transactions with what residents report domestically.

The U.S. is not scheduled to begin exchanging crypto trading data under the OECD’s CARF timetable until 2029. South Korea is due to begin exchanges in 2027. The gap helps explain why officials are considering delaying the tax, even though the allowance itself is clearly specified.

If South Korea taxes domestic exchange activity before it can track U.S. platform activity, authorities may obtain an incomplete picture of each person’s crypto gains. Domestic exchanges are easier to connect with local taxpayers, while overseas trades may remain outside the information available to South Korean officials.

The practical concern is unequal enforcement. A user trading through a South Korea-based exchange could have activity identified and taxed, while another user making comparable trades on a U.S. platform might be harder to assess. That does not necessarily mean the second user owes no tax, but officials may struggle to verify the person’s complete annual net income.

The presidential office is reportedly leaning toward delay because of this risk. The U.S. will not start sharing crypto data until 2029, while South Korea and other countries are scheduled to begin earlier. Parliament must approve any change to the start date.

The OECD’s Crypto-Asset Reporting Framework, or CARF, is an international timetable and system for countries to exchange information about crypto activity. Its purpose is to give tax authorities cross-border data, helping them identify residents’ holdings and transactions outside their home country.

The mechanism depends on participating jurisdictions collecting relevant information and exchanging it with one another. South Korea, Japan, and the United Kingdom are due to begin exchanges in 2027. Singapore, Switzerland, and Hong Kong are scheduled for 2028, while the United States is scheduled for 2029. This staggered timetable leaves gaps.

Those gaps matter to South Korea’s proposed tax. Officials worry they could track domestic exchange users before receiving comparable information from major U.S. platforms. The government had previously argued that foreign financial account reporting could help track offshore holdings, but the current concern is that missing U.S. tax data remains a major obstacle.

The United States, United Kingdom, and Japan already tax cryptocurrency without waiting for cross-border CARF data exchanges. Their approach shows that a government can impose crypto taxes before the international reporting system is fully operating. South Korea had also argued that foreign financial account reporting could help track offshore holdings.

South Korea’s concern is more specific: the timing of information access may create an uneven enforcement system. South Korean exchanges could provide activity linked to local users, while U.S. platforms may not provide equivalent data until 2029. Officials fear domestic users would therefore carry more visible tax obligations.

The issue is not simply whether crypto can be taxed. It is whether South Korea can measure annual net gains fairly across platforms and borders. The presidential office is leaning toward postponement, while Parliament considers a proposed January 1, 2029 date. A final decision is expected by early December.

Crypto profits are difficult to measure because a person may transfer assets, trade, or lend them through several exchanges. Domestic records may show only part of that activity. To calculate annual net income, authorities need to connect transactions, identify the taxpayer, and account for gains and losses across platforms.

Cross-border trading adds another layer. A South Korean resident might use a local exchange and a U.S. platform, but the two jurisdictions may not share data at the same time. Without overseas records, authorities could see domestic transactions while missing the purchases, sales, transfers, or losses needed to calculate the person’s true net result.

CARF is intended to improve this information flow, but countries begin exchanging data on different schedules. South Korea, Japan, and the U.K. are due to start in 2027, while the U.S. is scheduled for 2029. That gap drives South Korea’s possible delay.