South Korea considers fourth delay to crypto gains tax, pushing start to 2029
South Korea's presidential office is reportedly leaning toward postponing its crypto gains tax until 2029, citing the lack of U.S. trading data. The tax is still officially due to start on January 1, 2027.
CryptoSource: CoinDesk
South Korea is weighing a fourth postponement of its tax on cryptocurrency gains, which would move the start date to 2029, according to a report by Newsis. The report cited unidentified officials and said the presidential office is leaning toward a delay.
The main worry is how the burden would be distributed. Officials reportedly fear that the tax would fall mostly on users of exchanges based in South Korea, because authorities would find it hard to monitor activity on U.S. platforms. One official told the outlet that almost half of the crypto market is in the U.S., and described the absence of U.S. tax data as the biggest obstacle.
The discussions mark a change from July, when Deputy Prime Minister Koo Yun-cheol told lawmakers the tax would take effect in January 2027. Koo has since been replaced by Lee Hyung-il, who said at an October 6 parliamentary audit that he would gather opinions from parliament, experts and the industry.
Under the current rules, annual net income from crypto transfers or lending would be taxed at 20%, or 22% once local income tax is included, after a deduction of 2.5 million won, about $1,887. The National Tax Service still lists January 1, 2027 as the start date. The levy was originally scheduled to begin in 2022.
The concern is tied to the timing of cross-border data sharing under the OECD's Crypto-Asset Reporting Framework. South Korea, Japan and the U.K. are due to begin exchanging data in 2027, followed by Singapore, Switzerland and Hong Kong in 2028. The U.S. is not scheduled to start until 2029, according to the OECD timetable.
The U.S., U.K. and Japan already tax crypto without waiting for cross-border exchanges of data. South Korea's government had earlier argued that it could track offshore holdings through foreign financial account reporting.
Ruling Democratic Party lawmaker Park Min-kyu has proposed moving the start date to January 1, 2029, according to local media. A fourth delay would require parliament to amend the law.
Based on reporting by CoinDesk.