South Korea’s government put its own name to another delay of the country’s crypto income tax on Nov. 5, saying it will ask the National Assembly to move the start date from Jan. 1, 2027 to 2029. The ruling Democratic Party had proposed a deferral the day before.

The finance ministry said in a statement that it would consult lawmakers on the two-year postponement and use the time to prepare the tax system. The tax itself is already law; what changes is when collection begins, and only once lawmakers amend the Income Tax Act. A 2020 amendment created the levy; this would be its fourth postponement.

Deputy Prime Minister and Finance Minister Lee Hyoung-il gave two reasons at a briefing. “Because the exchange of information on virtual assets with the United States will begin in 2029, taxing immediately could put the domestic market at a relative disadvantage compared with overseas,” he said, according to a Chosun Biz translation of his remarks. The second was the industry’s rulebook, which he said “is expected to change significantly with the enactment of the Digital Assets Act.”

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Losses Can Offset Later Gains

The ministry also wants a three-year loss carryforward once the tax takes effect, so a year’s crypto losses could be deducted from gains in the years that follow. The planned rate is unchanged at 22%, local income tax included, on annual crypto income above 2.5 million won (nearly $1,900).

Lee laid out the timeline. A public-private working group on digital asset taxation will sort through the open issues by the first half of 2027, any amendment needed will go to the Assembly’s regular session that year, and detailed taxation standards will follow in the first half of 2028. The ministry said it would also use the two years to prepare for taxing overseas crypto trading.

At his Sept. 15 confirmation hearing, Lee answered a lawmaker’s call for a two-year delay by saying that “most people are non-taxable or face minimal tax burdens” because of the 2.5 million won deduction. Government officials were reported to be leaning toward 2029 on Oct. 26.

What the 2029 Date Depends On

The announcement moves the delay from a party request to a government plan, but traders face no change in the law until the National Assembly votes on it. By pinning the new date to the U.S. data exchange and the Digital Assets Act, the government has tied its 2029 target to two timelines that sit outside the tax code.

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