At a glance
- South Korea’s presidential office is moving toward another postponement of the crypto income tax due to start on 1 Jan 2027, the Seoul Economic Daily reported on Sunday, citing an unnamed official.
- The Electronic Times, in its own report, said the presidential office and the government are reviewing a two-year delay, to 2029.
“The discussion has moved toward delaying implementation of the crypto tax,” a presidential office official said on Sunday, according to the Seoul Economic Daily.
No formal announcement has been made. Neither report named the official, and the Electronic Times described the decision as a direction, not a final ruling (our translation from Korean).
If confirmed, it would be the fourth delay since the tax was written into the Income Tax Act in 2020, the Electronic Times noted. The office is known in Korea as Cheong Wa Dae, the presidential compound.
Why, according to the reports
The Seoul Economic Daily cited incomplete preparations for collecting the tax and opinion among young adults. The Electronic Times also pointed to opposition from young investors, who hold a relatively large share of crypto.
Both also cited the Crypto-Asset Reporting Framework (CARF), the system under which tax authorities swap data on users’ crypto trades. The United States is due to join only from 2029, both papers said. Until then, the Seoul Economic Daily wrote, the tax could fall mostly on users of Korean exchanges.
The Electronic Times said the United States accounts for close to half of the global crypto market. It called the risk “reverse discrimination” against domestic users (our translation).
What is at stake
The tax would apply 22%, including local income tax, to annual gains from selling or lending crypto above ₩2.5 million (about $1,890 or €1,690), both papers reported.
Without a change to the law, it starts in 68 days.
A Democratic Party lawmaker has already filed a bill to start the tax in 2029. The opposition People Power Party also wants a delay, so the amendment is expected to pass during the National Assembly’s tax review in November, the Seoul Economic Daily reported.
How we got here
On Thursday, Democratic Party leader Kim Min-seok called for a final check on the tax and said it must be settled this year. The same day, Deputy Prime Minister and Finance Minister Lee Hyung-il told lawmakers he would gather views and decide “after the most careful consideration,” Yonhap reported (our translation).
Earlier in the week, the finance ministry met the five won-market exchanges, which asked for clearer rules. Exchanges have not yet built tax reporting systems, Yonhap News TV reported on Sunday.
Not everyone in the ruling party agrees. Democratic Party lawmaker Yoon Hu-duk told the audit on Thursday that delaying a law already passed would shake “the basics” of the state, Yonhap reported.
What’s next
A final decision is due at a meeting between the government and the ruling party after this month’s parliamentary audit ends, according to the Seoul Economic Daily.
A delay then needs an amendment to the Income Tax Act. Until it passes, the tax is still due on 1 January.
This is not tax advice.
This article is for information only and is not investment advice.