South Korea's Crypto Tax May Slip Again, With 2029 Now on the Table

South Korea's ruling Democratic Party wants to hit pause on the country's crypto income tax — again. Lawmakers on the National Assembly's Finance, Economy and Planning Committee agreed Nov. 3 to recommend postponing it, with a two-year delay that would move the start to 2029 as the favored option, according to Seoul Economic Daily. The call came out of a closed-door meeting with government officials, where overseas transaction data, unfinished digital asset legislation and exchange readiness all loomed large. Lawmaker Oh Ki-hyung, the ruling party's secretary on the committee, said members still back taxing crypto income — they just want more time, telling reporters:

The recommendation now goes to party leadership and its policy committee, which will decide whether to delay and for how long. Most committee members leaned toward roughly two years, but nothing is final yet — the existing law still says crypto income taxation starts Jan. 1, 2027. The sticking point is data: lawmakers doubt the government can get reliable transaction records from exchanges outside South Korea. They're eyeing the OECD's Crypto-Asset Reporting Framework, which lets tax authorities swap info on crypto transactions — South Korea joins the exchange in 2027, while the US isn't expected to until 2029.

Democratic Party lawmaker Park Min-gyu already tried to solve that timing gap. His Oct. 16 bill would tie crypto taxation to the first qualifying CARF data exchange, pushing the start to Jan. 1 of the second year after. The National Tax Service isn't convinced the wait is needed. Deputy Commissioner Park Hae-young has argued incomplete overseas records don't necessarily block taxation, saying foreign account information and CARF data can shrink reporting gaps.

Domestic exchanges have a different headache. When investors move coins from overseas platforms, local operators may see the assets arrive without any record of the original purchase price — making taxable gains tough to calculate. Lawmakers also want to know how the planned Digital Asset Basic Act, which entered the final stages of government consultations in October, will reshape business classifications and transaction rules. Bithumb, meanwhile, has told lawmakers it needs six to nine months to develop and test its reporting infrastructure once authorities provide a proper testing environment.

This tax has been a moving target for years. South Korea approved the framework in 2020 with a January 2022 start, then postponed the start to 2023, later 2025, and finally 2027. Under current rules, individuals would pay 20% on annual crypto income above 2.5 million won, with local income tax lifting the effective rate to 22%; losses can offset gains in the same year but can't be carried forward. If the tax kicks in as scheduled, investors would report 2027 income in May 2028.