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

South Korea's Finance Minister Lee Hyoung-il announced on Thursday that the government intends to further postpone cryptocurrency income taxation by two more years, extending the deadline to 2029. This decision has reignited discussions on tax equity and policy credibility, following three prior postponements. Lee highlighted the necessity for additional time to gather overseas transaction data and to clarify the rules.

However, this move, just a month after the government had reaffirmed its commitment to proceed in January, has sparked criticism regarding concerns about policy predictability and potential political motivations.

During a briefing, Lee stated that the government would collaborate with the National Assembly to pursue this delay. The announcement followed the day prior when Kim Min-seok, Chairman of the ruling Democratic Party of Korea (DPK), formally requested another postponement. According to the legislation yet to be implemented, income derived from transferring or lending digital assets would be categorized as miscellaneous income.

Profits exceeding a 2.5 million won ($1,900) threshold would be subject to a 22 percent tax, encompassing local income tax. Net profits would be determined by subtracting acquisition costs and associated expenses from the proceeds.