South Korea’s ruling party and government fail to agree on crypto tax delay
A fourth discussion ended without a decision, leaving the planned January 2027 start in place while lawmakers weigh fairness and reporting concerns.
South Korea’s ruling Democratic Party and government failed for a fourth time on Oct. 28 to agree on whether to delay cryptocurrency taxation, according to Yonhap News Agency. After their meeting at the National Assembly in Seoul, the tax remained scheduled to start on Jan. 1, 2027, leaving investors and exchanges awaiting a decision.
Democratic Party lawmakers and finance ministry officials attended the meeting. Rep. Oh Gi-hyoung told reporters that participants agreed virtual assets should be taxed but raised concerns about fairness between people using domestic and overseas exchanges. The party will examine those issues further before deciding whether to seek a delay, he said.
What the scheduled crypto tax would cover
South Korea introduced the tax scheme in 2020 and has postponed its implementation three times, Yonhap reported. Under the current plan, annual cryptocurrency gains above 2.5 million won would face a 22 percent tax, including local income tax. The Korea Herald reported that the rules cover income from selling or lending virtual assets, with taxpayers first due to report and pay tax on 2027 income in May 2028.
The Korea Herald reported that gains and losses would be combined within a tax year, but losses could not be carried forward. That means a loss in one year would not reduce tax owed on gains in a later year. The treatment matters to investors whose returns vary sharply from year to year.
Why exchanges are seeking more time
Exchanges have sought clearer requirements before completing and testing systems to submit transaction records, The Korea Herald reported. Materials released by People Power Party Rep. Park Soo-young’s office showed 49 consultations between authorities and exchanges since 2022, while the reporting systems remained unfinished. A transaction that starts on an overseas exchange and ends on a Korean platform can leave the local exchange without the purchase price needed to calculate a gain.
National Tax Service Deputy Commissioner Park Hae-young acknowledged that obtaining all records from decentralized exchanges and overseas transactions would be difficult, according to The Korea Herald. He said incomplete overseas data would not by itself prevent taxation and that the agency would use international reporting and overseas financial account data to limit omissions.
Several pending bills would postpone the tax until 2029 or 2030, The Korea Herald reported. Any change to the scheduled start requires an amendment to the Income Tax Act before Jan. 1. Oh said the ruling party would review the concerns before reaching its final decision; no delay was agreed at the Oct. 28 meeting.
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Sources and context
- Ruling party, gov't fail to agree on delay of cryptocurrency taxYonhap News Agency
- After three delays, is Korea ready to tax crypto?The Korea Herald
AI-assisted article checked against the listed sources. NewsJaws did not conduct interviews or attend the reported events.