South Korea chases 2029 crypto tax start with new break for losses

South Korea's government said on Nov. 5 that it will push for a two-year delay to crypto income taxation, targeting a 2029 start, and wants to hand investors a fresh break: three years of loss carryforward to offset later gains. The plan is being worked out with the National Assembly, and it is not law. Until legislators move, the National Tax Service's guidance still points to taxation of eligible crypto transfers and lending beginning Jan. 1, 2027.

The timing is tight. The push comes a day after the Democratic Party asked for another postponement, less than two months before the scheduled 2027 kickoff, according to Yonhap. Party leader Kim Min-seok said he wants the Digital Asset Basic Act to lay out an overall framework before companies and investors get an adjustment period — and flagged overseas transaction information, computer-system checks and taxpayer guidance as work that should come with any delay.

Seoul has its own reasons for wanting two more years. The government pointed to expected crypto transaction-information exchange with the United States starting in 2029, plus changes anticipated under digital-asset legislation. The 2029 date has already surfaced in a legislative proposal: an Aug. 28 release from Rep. Kim Sang-hoon describes his Income Tax Act amendment shifting the start from Jan. 1, 2027 to Jan. 1, 2029 — conditional, still, on that change actually passing.

The delay talk is a rerun. The Democratic Party agreed to a two-year moratorium back in December 2024, and the NTS says an amendment passed that month produced the very January 2027 timetable now in limbo. Moving to 2029 and adding loss relief will both require legislative changes.

What investors would face under the current framework: for residents, crypto income comes from transfers and lending after acquisition costs and associated expenses are deducted. An annual 2.5 million won basic deduction applies, then a 20% national income-tax rate — 22% once local income tax is folded in, as Kim Sang-hoon's parliamentary release describes it. Losses and gains are netted annually, with residents reporting in May of the following year.

For coins held before Jan. 1, 2027, the NTS uses the higher of actual acquisition cost and the asset's 2026 year-end market value as the starting cost basis. So the math runs on income after costs and the deduction — not the total value of a portfolio. As of Nov. 5, the 2029 target is proposed, not enacted, and the 2027 start remains the scheduled regime.