South Korea’s Crypto Tax Slips Again

South Korea is considering postponing its tax on cryptocurrency gains to 2029, according to CoinDesk, citing a Newsis report that said the presidential office is leaning toward a fourth delay.

That matters because the tax is not some abstract policy sketch. Under the current law, annual net income from crypto transfers or lending would be taxed at 20%, or 22% including local income tax, after a 2.5 million won deduction. The National Tax Service still lists Jan. 1, 2027 as the start date. Changing that would require parliament to amend the law.

The official reason under discussion is less ideological than logistical. Newsis reported that unidentified officials said the burden would fall disproportionately on users of South Korea-based exchanges because authorities would struggle to track trading on U.S. platforms. One official described the lack of U.S. tax data as the main obstacle.

That exposes the denominator politicians prefer not to discuss: a tax is only as fair as the government’s ability to see the taxable activity. If regulators can monitor domestic exchanges but not a large slice of offshore trading, the levy stops looking neutral and starts looking like a surcharge on the easiest people to find.

CoinDesk said this would mark a shift from the government’s position in July, when then-Deputy Prime Minister Koo Yun-cheol told lawmakers the tax would begin in January 2027. Koo has since been replaced by Lee Hyung-il, who told lawmakers during an Oct. 6 parliamentary audit that he would collect views from parliament, experts and industry.

The cross-border data problem is tied to the OECD’s Crypto-Asset Reporting Framework. South Korea, Japan and the U.K. are due to begin exchanging crypto data in 2027, while Singapore, Switzerland and Hong Kong are set to follow in 2028. The U.S. is not scheduled to start until 2029, according to the timetable cited by CoinDesk.

That timing makes the proposed delay look less like a philosophical retreat from crypto taxation than an admission that enforcement arrives in pieces. The awkward part is that the U.S., U.K. and Japan already tax crypto without waiting for full international data exchange. South Korea had also previously argued it could track offshore holdings through foreign financial account reporting. Governments, like traders, tend to rediscover nuance when collection gets difficult.

Ruling Democratic Party lawmaker Park Min-kyu has proposed pushing the start date to Jan. 1, 2029, local media reported. The tax was first scheduled to start in 2022.