Korea seeks another crypto tax delay over gaps in overseas data and rules

The South Korean government has announced plans to delay cryptocurrency income taxation by another two years, extending the deadline to 2029, according to Finance Minister Lee Hyoung-il. This decision comes after three previous postponements, reigniting discussions surrounding tax fairness and policy credibility. Lee cited the need for additional time to gather overseas transaction data and refine the rules as justification for the extension.

However, the move has been met with criticism over concerns about policy predictability and potential political motivations. Just a month prior, the government had reaffirmed its commitment to implementing the tax in January. Lee stated that the government would collaborate with the National Assembly to pursue the delay. The announcement followed a formal request from ruling Democratic Party of Korea (DPK) Chairman Kim Min-seok for another postponement.

The legislation in question, set to be implemented, would classify income from transferring or lending digital assets as miscellaneous income. Annual net profits surpassing a 2.5 million won ($1,900) threshold would be subject to a 22 percent tax rate, encompassing local income tax. Net profits would be calculated by subtracting acquisition costs and related expenses from proceeds.