South Korea weighs fourth delay on its crypto gains tax, pushing it to 2029

South Korea is contemplating a fourth delay to its crypto gains tax, extending its implementation until 2029, according to Newsis. The decision is reportedly influenced by concerns that the tax would primarily affect users of South Korean-based exchanges, as authorities may encounter difficulties in monitoring transactions on U.S. platforms, with no U.S. tax data available, an official told the outlet.

The shift in stance aligns with Deputy Prime Minister Koo Yun-cheol's initial statement in July that the tax would commence in January 2027, but subsequent changes were made by Lee Hyung-il, who is currently gathering input from various sources. Currently, the tax is set to begin on January 1, 2027, at 20% or 22% including local income tax, after deducting 2.5 million won ($1,887).

The delay is primarily due to disparities in the timing of countries sharing crypto trading data under the OECD's Crypto-Asset Reporting Framework (CARF), with the U.S. lagging until 2029. South Korea, Japan, and the UK are scheduled to share data in 2027, while Singapore, Switzerland, and Hong Kong follow in 2028. The U.S. has already imposed crypto taxes without waiting for cross-border data exchanges.

The South Korean government had initially pursued tracking offshore holdings through foreign financial account reporting, but the ruling Democratic Party lawmaker Park Min-kyu has suggested moving the tax start date to January 1, 2029, necessitating a law change.