South Korea Delays Crypto Tax to 2029, Introducing Three-Year Loss Carryforward
The taxation of virtual asset income, originally scheduled to take effect in January 2027, will be delayed by another two years until 2029. This marks the fourth postponement since the Income Tax Act was amended in December 2020. The tax was initially scheduled to take effect in 2022, but was first
South Korea has postponed the implementation of virtual asset income tax until 2029. This comes after the tax was delayed four times since December 2020. Initially planned for a January 2027 start, the tax will now be delayed by two years. Deputy Prime Minister Lee Hyeong-il announced the decision at a Government Complex Seoul briefing on November 5.
The new tax would impose a 20% tax on virtual asset trading gains exceeding 2.5 million won, approximately $1,843. The delay is due to concerns over international tax information exchange, particularly with the United States through the OECD's Crypto-Asset Reporting Framework (CARF). CARF information exchange is expected to begin in 2029, two years after the tax implementation.
The government also introduced a three-year loss carryforward system, allowing losses to be deducted from gains over a three-year period, similar to practices in the US and UK. The system won't apply to minority shareholders of domestic listed companies. The government aims to strengthen infrastructure for tax implementation and finalize tax rules for newer transaction types, including stablecoins and perpetual futures.
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