South Korea to Delay Crypto Tax Yet Again
South Korea is set to delay its controversial crypto tax for the fourth time, potentially pushing implementation to 2029, as the country's presidential office considers postponing the tax originally scheduled for January 1, 2027.
The proposed crypto tax would require South Korean investors to pay 22% on annual profits exceeding 2.5 million won (approximately $1,888), comprising 20% income tax and 2% local tax. However, increasing pushback from lawmakers and the crypto industry has led to reconsideration, citing the government's inability to effectively monitor transactions on foreign exchanges.
International reporting concerns
A major concern is that implementing the tax without an effective international reporting system would disadvantage South Korean exchanges and their users compared to foreign platforms. The government lacks the capability to track cross-border cryptocurrency transactions, creating significant enforcement challenges.
Legislative proposal
Earlier this month, Democratic Party lawmaker Park Min-kyu introduced a bill linking crypto taxation to international information-sharing agreements. The proposal would delay implementation until two years after the first exchange of cryptocurrency transaction data under the OECD's Crypto-Asset Reporting Framework (CARF).
The bill would see crypto taxation delayed until two years after the first exchange of cryptocurrency transaction information under the Organization for Economic Cooperation and Development's Crypto-Asset Reporting Framework (CARF).
Timeline of delays
The crypto tax was first approved in 2020 with an original implementation date of January 2022. Since then, it has been delayed three times: first to 2023, then to 2025, and most recently to 2027. With the potential new delay, implementation could be pushed to 2029, when the U.S. is expected to join the CARF system.
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