South Korea Proposes to Delay Cryptocurrency Tax Until 2029

On November 5, 2026, the South Korean government proposed delaying the introduction of a tax on cryptocurrency income by two years—from January 1, 2027, to 2029. This was announced by Finance and Economy Minister Lee Hyun Il. The new date needs to be agreed upon with the National Assembly, as current legislation still provides for the start of taxation in 2027.

The tax was included in amendments to the income tax law back in 2020. Initially, it was planned to be introduced in January 2022, but the deadlines have been repeatedly postponed. If the new proposal is approved, it will be the fourth deferral.

Under the current model, the rate is 22% including local tax. It is to be applied to the portion of annual income from cryptocurrency transactions exceeding 2.5 million won, or approximately $1,900. The government has not proposed changing these parameters.

One of the reasons for the postponement cited by the ministry is the timeline for launching the exchange of tax information on cryptocurrency transactions with the United States. Such an exchange within the framework of the international CARF system is expected from 2029.

According to the government, introducing the tax before the start of full data exchange may create differences in the taxation conditions of transactions within the country and on foreign platforms. Additional time is expected to be used to prepare mechanisms for controlling and accounting for cross-border transactions.

The second reason cited is the anticipated changes in the regulation of digital assets. The authorities hope to align tax rules with the new digital assets law, which is still in preparation.

How the accounting of cryptocurrency losses will change

In addition to the postponement, the government proposed allowing the carryover of investment losses for the next three years. This mechanism will allow a negative financial result from one tax period to be accounted for when calculating the tax on profits from cryptocurrency transactions in subsequent years.

For example, a loss incurred in 2029, under the established conditions, can be offset against the corresponding profit up to 2032. However, losses from already completed transactions before the tax comes into effect will not automatically be included in the new mechanism.

To prepare the changes, the ministry will create a joint working group with the participation of government agencies, industry organizations, and experts.

By the end of the first half of 2027, the group should prepare proposals for improving the system. Legislative amendments are planned to be presented at the next session of the National Assembly in 2027, and detailed taxation rules in the first half of 2028.

Thus, the postponement of the tax until 2029 remains a government initiative for now. The final date for the start of taxation will depend on the adoption of the relevant legislative changes.