South Korea plans to postpone a tax on cryptocurrency gains until 2029, seeking a fourth delay to a policy that has struggled to keep pace with the market it is supposed to regulate.
Deputy Prime Minister and Finance Minister Lee Hyeong-il said on Nov. 5, 2026, that the government would work with lawmakers to defer the tax for another two years. The levy is currently scheduled to take effect on Jan. 1, 2027.
The proposal would give investors another reprieve from a planned 20% tax on annual cryptocurrency trading gains exceeding a basic deduction of 2.5 million won. It would also give authorities more time to establish rules for deducting losses and collecting information on trades conducted overseas.
But the announcement, coming less than two months before the scheduled start, risks raising fresh questions about the credibility and consistency of South Korea’s tax policy.
The tax was established through an income-tax law revision in December 2020 and was originally due to begin in 2022. Its introduction was subsequently pushed to 2023, then to 2025 and finally to 2027. Officials have cited inadequate preparations, investor-protection concerns, fairness and gaps in the regulatory framework.
Lee acknowledged the repeated setbacks.
“I take seriously the fact that we are proposing another postponement after implementation has already been delayed three times,” he said.
Even with a revised timetable, he said, the government would uphold the principle that income should be taxed and use the additional preparation period to ensure implementation in 2029.
A central concern is the government’s ability to obtain information on cryptocurrency transactions outside South Korea.
Officials said information exchanges with the U.S. under the Organization for Economic Cooperation and Development’s Crypto-Asset Reporting Framework, known as CARF, are expected to begin in 2029. Starting the tax before those exchanges are available could put the domestic market at a disadvantage, the government said, citing views from experts, industry representatives and lawmakers.
The government also pointed to a proposed digital-asset law that could reshape the market’s regulatory framework. Officials said allowing more time would help align the tax system with new investor protections and changes in how digital assets are traded.
During the proposed postponement, the government plans to pursue changes that would account for cryptocurrency prices’ sharp swings.
One proposal would allow investors to carry losses forward for up to three years to offset gains, subject to discussions with lawmakers. The change would let investors deduct qualifying losses from subsequent taxable profits. The U.S. and U.K. are among the countries that already recognize investment losses in calculating tax liabilities.
Authorities also plan to expand systems for collecting, linking and analyzing domestic and overseas transaction records to improve enforcement of the tax on offshore trading.
A working group comprising experts, industry representatives and officials from relevant ministries will examine the tax structure, detailed assessment rules and ways to simplify filing.
The government aims to develop its reform proposals in the first half of 2027 and submit related legislation during that year’s regular parliamentary session. It plans to publish detailed tax guidelines in the first half of 2028, giving exchanges and investors time to prepare for the planned 2029 rollout.
