South Korea weighs a fourth delay to its 22% crypto tax

South Korea may delay its crypto tax again. The presidential office is leaning toward pushing the 22% tax on crypto gains to 2029, not the January 2027 start now written into law, Korean media reported on 25 October.

The move is not official. An unnamed official in the presidential office said on 25 October that "the discussion has moved toward delaying implementation of the crypto tax," the Seoul Economic Daily reported. A final decision still needs a meeting between the government and the ruling party, expected once this month's parliamentary audit ends. Officials had met the country's five biggest exchanges around 20 October as the decision took shape. It would be the fourth delay since lawmakers wrote the tax in 2020.

A 22% tax that keeps slipping

Korea's tax came out of a 2020 change to the Income Tax Act. It would take 20% in national income tax plus a 2% local tax on a person's yearly crypto gains, once those gains clear a 2.5 million won allowance, around $1,900. Someone who booked 5 million won in gains would owe 550,000 won after the deduction.

Getting there has been slow. The levy was first set for 2022. It slid to 2023, then 2025, then January 2027. Each time the reason ran much the same. The system to track and collect was not ready.

Why the data gap matters

Officials keep returning to one problem. Korea cannot easily see what its residents trade on exchanges based abroad. A tax that only domestic platforms can report, the thinking goes, would land hardest on people who stay home, while traders on foreign venues slip through.

A fix exists, and it is global. Under the OECD's Crypto-Asset Reporting Framework, tax authorities swap account and transaction data on crypto users. Korea sits in the group committed to first exchanges in 2027. The presidential office pointed to the United States, which it said would not start sharing data until 2029. Line the tax up with that date, the argument runs, and the gap closes.

That gap is real. It is also not new. Korea has now spent five years not collecting a tax it wrote in 2020, and the data problem was in plain sight the day the law passed.

Other governments are moving at their own speed. France has set out crypto tax rules of its own, and Singapore has tightened how it treats stablecoins. Korea, for all the delay, still has the law on the books.

Two parties, one young electorate

Both big parties want a delay. They disagree on the shape. Kim Min-seok, who leads the ruling Democratic Party, said the issue "needs to be settled this year." Ruling-party lawmakers have filed a bill that would start the tax in 2029. The opposition People Power Party has pushed its own delay and repeal bills over the past year. Lawmakers have also not settled how to tax staking rewards, airdrops or income from DeFi, another gap the delay would buy time to close.

Politics sits underneath all of it. The presidential office cited opinion among younger Koreans, many of whom trade crypto and vote. An industry survey this month found wide support for a delay among crypto firms and tax experts. What no one has put a figure on is the cost. No estimate has been published for the revenue a two-year delay would give up, or for how close the collection system actually is to working.

What to watch

For now, nothing has changed. The 22% tax is still set to start on 1 January 2027. Only the National Assembly can move that date, and it has not.

November is the next marker, when lawmakers review tax law. Reports point to late November or early December for a decision. If a bill passes, the start slides to 2029. If one does not, the 2027 date stands. Investors in Korea have heard this before, three times over.