South Korea has postponed its 22% crypto gains tax until 2029, the finance ministry said on November 5, Reuters reported.
The government will consult parliament on changing the start date while preparing systems to tax domestic and overseas transactions.
I take it heavily that we are announcing another tax deferral following three previous postponements of the taxation implementation. Even if the implementation timing is adjusted, the basic tax principle that ‘taxation follows income’ must be upheld. The government will utilize the upcoming two-year preparation period to ensure that virtual asset taxation is implemented smoothly in 2029, said Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il.
Plans to tax virtual assets were initially set to take effect in 2022, but implementation was repeatedly delayed by inadequate infrastructure, investor-protection concerns, and a lack of clear institutional guidelines.
After an initial one-year delay to 2023 and two subsequent two-year postponements, the enforcement date was eventually set for January 1 of the coming year.
With another postponement announced less than two months before launch, the decision is expected to fuel debate over the reliability and consistency of government policy.
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Overseas trading creates reporting gaps
The delay reflected the fact that tax information exchanges with the United States would begin in 2029. Starting taxation before that could put the domestic market at a disadvantage versus global markets, Reuters reported.
In September, a report from the National Assembly Budget Office identified the underlying challenge: overseas exchanges lack the same transaction-reporting obligations as domestic platforms, which made it difficult for Korean authorities to identify some traders.
The government also wants to align taxation with broader digital asset legislation that could reshape the market.
Existing tax rules and proposed changes
Under the existing rules, residents would pay 22% tax (20% national and 2% local) on annual net crypto income above 2.5 million won. It covers income from selling, exchanging, or lending digital assets after deducting acquisition costs and eligible expenses.
The budget office reported 11.13 million domestic exchange user accounts in the second half of 2025. It showed how widely the planned tax could affect South Korea’s crypto market.
Over the next two years, the government will work out how to tax crypto traded on foreign platforms, while balancing market swings, investor protections, and industry growth.
The government plans to send the new tax bills to parliament in 2027 and share the exact tax rules with investors by mid-2028.
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