<p style="text-align: justify">South Korea’s government announced it will seek to postpone the implementation of its cryptocurrency income tax until 2029, marking the fourth delay since the tax was first legislated in 2020. The decision was revealed on November 5, a day after the ruling Democratic Party submitted a proposal calling for a deferral. Officials stated the plan must still be approved through an amendment to the Income Tax Act by the National Assembly.</p>
<h2 id="key-reasons-behind-the-delay">Key reasons behind the delay</h2>
<p style="text-align: justify">The Ministry of Economy and Finance indicated in a statement that the two-year extension is intended to allow time for comprehensive preparation of the tax system. Deputy Prime Minister and Finance Minister Lee Hyoung-il outlined the key motivations for the postponement during a public briefing.</p>
<p style="text-align: justify">Lee pointed to the timeline for sharing information on virtual assets with the United States, which is scheduled to begin in 2029. He argued that commencing taxation before this system is in place could leave the domestic market at a disadvantage compared to overseas competitors. Additionally, Lee stated that the pending Digital Assets Act, expected to bring major regulatory changes to the sector, necessitated further preparation.</p>
<blockquote>
 <p>Domestic virtual asset taxation should align with the commencement of international information exchange in 2029 to avoid putting South Korean crypto traders at a competitive disadvantage, while significant regulatory changes are anticipated with the Digital Assets Act.</p>
</blockquote>
<p style="text-align: justify">The ministry also plans to introduce a three-year loss carryforward, which would allow crypto-related losses in one year to be deducted from future gains when the tax eventually takes effect.</p>
<p style="text-align: justify;background: linear-gradient(135deg,#ffffff 0%,#fffdf9 100%);border:1px solid #f1e4d8;border-left:4px solid #F69434;padding:14px 16px;border-radius:12px;color:#1e293b;font-size:15px;line-height:1.7">Mini dictionary: Digital Assets Act, a legislative framework under development in South Korea that aims to set comprehensive rules for digital asset trading, investor protection, and regulatory oversight, with potential for significant impact on the crypto industry’s operations within the country.</p>
<h2 id="tax-structure-and-timeline">Tax structure and timeline</h2>
<p style="text-align: justify">The tax, created by a 2020 amendment, will impose a 22% rate—including local income tax—on annual cryptocurrency gains above 2.5 million won, approximately $1,900. Despite repeated delays, the rate and threshold remain unchanged.</p>
<p style="text-align: justify">The Ministry detailed a new schedule to implement the tax. By the first half of 2027, a working group comprising government and private sector representatives will address outstanding issues related to digital asset taxation. Any required legislative amendments are expected to be submitted to the National Assembly during its regular session that year. Detailed standards for taxation will follow in the first half of 2028.</p>
<table style="border:1px solid #f1e4d8;padding:8px">
 <thead>
  <tr>
   <th>Item</th>
   <th>Original Start Date</th>
   <th>Revised Start Date</th>
   <th>Tax Rate</th>
   <th>Annual Deduction</th>
  </tr>
 </thead>
 <tbody>
  <tr>
   <td>Crypto Income Tax</td>
   <td>Jan. 1, 2027</td>
   <td>Jan. 1, 2029</td>
   <td>22%</td>
   <td>2.5 million won (~$1,900)</td>
  </tr>
 </tbody>
</table>
<p style="text-align: justify">Furthermore, the ministry intends to use the additional time to improve readiness for taxing international crypto transactions.</p>
<h2 id="awaiting-legislative-approval">Awaiting legislative approval</h2>
<p style="text-align: justify">Although the administration has moved to formalize the postponement, no change will take effect until the National Assembly passes the required amendment. Tying the new timeline to international data-sharing initiatives and the Digital Assets Act means the tax’s introduction now hinges on developments beyond the domestic tax code.</p>
<p style="text-align: justify">At his September confirmation hearing, Lee noted that most Korean crypto investors would remain unaffected or face minimal liabilities due to the annual 2.5 million won deduction threshold.</p>
<blockquote>
 <p>Officials underlined that until the National Assembly votes, traders will see no immediate change in their tax obligations, with the new planned timeline offering both regulatory clarity and time for industry adjustment.</p>
</blockquote>
<p>The post <a href="https://en.coin-turk.com/south-korea-to-postpone-crypto-income-tax-to-2029-seeks-national-assembly-approval/" rel="noopener noreferrer nofollow">South Korea to postpone crypto income tax to 2029, seeks National Assembly approval</a> appeared first on <a href="https://en.coin-turk.com" rel="noopener noreferrer nofollow">COINTURK NEWS</a>.</p>

South Korea to postpone crypto income tax to 2029, seeks National Assembly approval

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