South Korea weighs a fourth delay of its crypto gains tax, to 2029, over missing U.S. data

South Korea is leaning toward delaying its tax on crypto gains for a fourth time, from January 2027 to 2029, CoinDesk reported. Cointelegraph, citing Korean outlet Newsis, reported the same discussion. Nothing is final: parliament must amend the law, with a decision expected by early December.

Why officials want to wait

The concern is data. Under the OECD's Crypto-Asset Reporting Framework, South Korea, Japan and the U.K. are due to begin exchanging data in 2027, Singapore, Switzerland and Hong Kong in 2028, and the U.S. not until 2029. CoinDesk quoted an official saying almost half of the crypto market is in the U.S., and the worry is that the tax would fall mostly on users of Korean exchanges because trading on U.S. platforms is hard to track.

The rules as written

Annual net income from crypto transfers or lending would be taxed at 20%, or 22% with local income tax, after a deduction of 2.5 million won (about $1,887). The levy was first scheduled for 2022. Ruling Democratic Party lawmaker Park Min-kyu has proposed moving the start to Jan. 1, 2029, per local media cited by CoinDesk.

A shift in tone

In July, then Deputy Prime Minister Koo Yun-cheol told lawmakers the tax would go ahead. Koo has since been replaced by Lee Hyung-il, who said on Oct. 6 he would gather views from parliament, experts and industry. The U.S., U.K. and Japan already tax crypto without waiting for cross-border data swaps.

For traders, a delay would keep Korean retail investors, a large force on domestic exchanges, untaxed on gains for two more years. We did not find a measurable price effect tied to this report. Bitcoin sits near $80,000 (see crypto prices).

What to watch

Three things decide this. First, whether parliament takes up the amendment before the early December deadline, since without a change the tax starts in January 2027 as written. Second, whether the government sticks to its earlier argument that it can track offshore holdings through foreign financial account reporting, which CoinDesk says it argued previously. Third, whether other countries move first: Japan and the U.K. are due to start exchanging data in 2027, two years before the U.S.

The practical stakes differ by holder. An investor who sells on a Korean exchange would, under the current text, report gains above the 2.5 million won deduction. An investor holding on a U.S. platform is the case officials say they cannot yet see. That gap is the stated reason for the delay.

Sources: CoinDesk; Cointelegraph. The officials' position is reported, not confirmed by the government. Information, not investment advice.