South Korea’s presidential office, Cheong Wa Dae, is considering another delay to the taxation of crypto-asset income, which had been scheduled to begin on January 1, 2027. Several South Korean outlets, including the Seoul Economic Daily and the Korea Economic Daily, reported the plan on October 25, citing a presidential office official.
According to the Korea Economic Daily, the official said the office is “considering a plan to delay taxation of crypto-asset income by about two more years.” If the delay goes ahead, it will be the fourth postponement since the tax was adopted through a 2020 revision of the Income Tax Act.
The presidential office, however, said in a notice to reporters that the matter is “under review, and nothing has been decided.” Under the planned framework, annual income from transferring or lending crypto assets would be taxed at 22%, including local income tax, on the portion above a basic deduction of 2.5 million won.
Fourteen lawmakers, including Rep. Park Min-kyu of the ruling Democratic Party of Korea, have already introduced an amendment to the Income Tax Act that would push the start of the tax back to 2029. The main opposition People Power Party has also called for a delay as a party, and its lawmakers have reportedly submitted separate bills to postpone the tax by two years, postpone it by three years, or scrap it altogether.
The presidential office is expected to decide on its final position after this month’s parliamentary audit of government agencies wraps up, following consultations between the ruling party and the government. Democratic Party leader Kim Min-seok said on October 22 that the party would “discuss whether to proceed with the tax as planned or how to supplement the system, and reach a conclusion by the end of the year.” Whether to delay the tax is expected to be debated during the National Assembly’s review of tax bills in November.
Media outlets point to the same main reason for the delay: tax authorities cannot adequately track trading on overseas exchanges, which could leave users of domestic exchanges carrying a disproportionate share of the tax burden. Under the Crypto-Asset Reporting Framework (CARF), through which tax authorities collect information on users’ residence and transactions from crypto-asset service providers and share it with one another, South Korea will begin exchanging data in 2027, but the United States will not join until 2029. According to the Korea Economic Daily, the presidential office official said that because of the later U.S. participation, South Korea would be unable to receive nearly half of the information on overseas crypto transactions.
The 2029 start date in the ruling party’s amendment coincides with the year the United States joins CARF. Concern for public sentiment among younger people has also been cited as a factor. According to the Korea Economic Daily, people in their 20s and 30s account for 44% of users on domestic exchanges.
Until September, the government had maintained that the tax would take effect as scheduled. Koo Yun-cheol, then deputy prime minister and minister of finance and economy, told the National Assembly on July 29 that taxation would begin in January 2027. His successor, Deputy Prime Minister and Minister of Finance and Economy Lee Hyung-il, stated in a written response during his confirmation process in September that “it is desirable to begin taxation in 2027 as planned,” and reaffirmed that position before the National Assembly on the 28th after taking office.
Separately from the tax itself, South Korea is also building a system to monitor cross-border crypto-asset transfers. On October 7, the Ministry of Finance and Economy issued an advance legislative notice for an amendment to the enforcement decree of the Foreign Exchange Transactions Act. The amendment would require transfers between domestic and overseas service providers, as well as transfers between domestic service providers and personal wallets, to be reported to the Bank of Korea’s foreign exchange data network. The rules are scheduled to take effect on Thursday, December 3, 2026, and the information collected will be shared with agencies including the National Tax Service and the Financial Supervisory Service.
In Japan, amendments to the Financial Instruments and Exchange Act and related laws that classify crypto assets as financial instruments were enacted on July 15 this year. Separate taxation of income at a 20% rate will apply from January 1 of the year following the year in which the amended law takes effect. If the law takes effect in 2027, the new treatment will cover transactions from January 2028. Japan’s CARF-aligned rules also took effect on January 1, 2026, requiring crypto-asset exchange service providers to verify users’ tax residency and report to the tax authorities by April 30 of the following year.
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