Korea seeks crypto tax delay to 2029, loss carryforward

At a glance

South Korea’s government will seek to postpone its 22% tax on crypto gains by two years, from January 2027 to 2029, Finance Minister Lee Hyoung-il said at a press briefing in Seoul on Thursday, 5 Nov, Yonhap reported.
The government also wants a three-year carryforward, so a loss in one year can be set against gains in the next three. Both changes need the National Assembly to amend the Income Tax Act; until then, the tax is still due on 1 Jan 2027.

Lee said the government would seek the delay together with lawmakers. It would be the fourth postponement of a tax first written into law in 2020 and meant to start in 2022, according to Yonhap and The Korea Herald.

“It is with a heavy heart that I announce another proposed delay in taxation, after its implementation has already been postponed three times,” Lee said, in Yonhap’s English translation of his remarks.

The decision follows the ruling Democratic Party, which on Wednesday formally asked the government to delay the tax until a digital asset law is in place.

Why 2029

The government tied the new date to data from abroad. South Korea is due to start exchanging crypto transaction information with the United States in 2029 under the OECD’s Crypto-Asset Reporting Framework (CARF), and taxing earlier could put the domestic market at a disadvantage, the ministry said, according to Yonhap.

The gap is practical. A Korean exchange that receives tokens bought abroad often cannot see what the user paid for them, and without that cost it cannot calculate the gain, the Herald reported.

“Once we begin receiving cryptocurrency transaction data from the United States in 2029, we will have enough information to tax investors who use US exchanges on the same basis as those who trade in the domestic market,” Lee said, according to the Herald’s translation.

The government also wants the tax rules to line up with the planned Digital Asset Act, the market-structure law it said it will work with the Financial Services Commission (FSC) to speed up.

What the loss carryforward would change

Under the current law, individuals would pay 22%, including local income tax, on yearly net gains from selling or lending crypto above ₩2.5 million (about $1,860 / €1,660). Only losses from the same year can be set against gains.

Under the proposal, losses could offset gains for up to three years. Losses realised in 2029 could be used against gains through 2032, while losses from before the tax starts would not count, the Herald reported.

What’s next

The government will seek lawmakers’ approval for the delay and the carryforward in this year’s regular session; the Income Tax Act has to be amended before January for the delay to take effect, according to the Herald.

A working group of officials, industry representatives and experts is due to meet “soon” and review tax rules for different transactions through the first half of 2027, the ministry said, per Yonhap. Any further amendments would go to the 2027 regular session, and detailed tax guidelines are planned for the first half of 2028, the Herald said.

The 2029 start date is a government proposal. It has not been passed into law.

This is not tax advice.

Earlier: leaning toward a fourth delay · a bill to start the tax in 2029 ·

This article is for information only and is not investment advice.