South Korea's finance minister said on Thursday that the government will seek to postpone its planned taxation of cryptocurrency gains by two years, from 2027 to 2029, citing the timetable for tax information exchange with the United States and the need to prepare for adjustments to the regulatory framework.
The remarks were made by Finance Minister Lee Hyung-il at a press conference in Seoul, where he noted that the government will coordinate with the National Assembly on the delay proposal. "It is with a heavy heart that I announce that the virtual asset taxation plan will be delayed once again — after its implementation had already been postponed three times," Lee said. He added that the government will use the two years to ensure that virtual asset taxation can be smoothly implemented in 2029.
The government explained that, given South Korea's plan to begin exchanging virtual asset-related information with Washington in 2029, imposing the tax before then could put the domestic cryptocurrency market at a disadvantage. The Ministry of Economy and Finance said: "The proposed delay is intended to uphold the basic principle that income should be taxed, while enhancing the effectiveness of taxation on both domestic and overseas transactions, ensuring fairness among taxpayers, and establishing a reliable and stable tax framework."
The government first proposed taxing virtual asset gains in 2020, with implementation originally set for January 2022. If the delay proposal is ultimately approved, this will be the fourth postponement of the policy. Under the plan, a 22% tax (including local income tax) would be levied on annual cryptocurrency gains exceeding 2.5 million won (approximately US$1,869).
The government plans to form a working group involving both the public and private sectors, aimed at improving the tax system, developing detailed taxation rules for various types of transactions, and simplifying the filing process for taxpayers. The Ministry of Economy and Finance said the working group will hold its first meeting soon and continue discussions until the first half of next year; in addition, the ministry plans to submit draft legal amendments at the National Assembly's regular session in 2027.
The Ministry of Economy and Finance also said it will continue to monitor progress on international arrangements for information sharing regarding the taxation of overseas transactions. Given the sharp volatility of cryptocurrency prices, the government also plans to allow investors to carry forward losses for up to three years to offset future gains, a practice modeled on relevant conventions in the United States and the United Kingdom. In addition, the government will work with the Financial Services Commission (FSC) to accelerate the enactment of digital asset-related legislation, aiming to promote robust market growth and protect user rights.
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