South Koreas government has backed postponing tax on cryptocurrency gains by another two years to 2029, in what would be the fourth delay to its implementation.
Finance Minister Lee Hyoung-il announced the proposal Thursday, saying the government would consult lawmakers on postponing the January 2027 implementation date.
The tax would impose a 22% levy, comprising a 20% income tax and 2% local tax, on annual crypto gains exceeding 2.5 million won ($1,860).
The government cited 2029 as the start of information exchange with the US under the Crypto-Asset Reporting Framework (CARF). It said imposing the tax before those exchanges begin could put the domestic market at a disadvantage relative to overseas markets. It also wants to account for changes under planned digital asset legislation.
Officials also said they plan to introduce a three-year loss carryforward provision, allowing investors to offset crypto losses against profits earned over the following three years. The government plans to submit amendments to improve the tax system during parliaments regular session in 2027, with detailed tax guidelines planned for the first half of 2028.
The tax was originally scheduled to take effect in January 2022 but was subsequently postponed to 2023, 2025 and 2027.
The proposal reverses the governments previous position. A Finance Ministry official said in May that implementation would proceed in 2027.
South Korean finance officials recently engaged with major crypto exchanges amid growing calls to postpone the tax. Industry representatives cited unresolved tax rules for different transaction types and insufficient time to prepare the necessary infrastructure.