South Korea will delay its long-awaited crypto gains tax for a fourth time, pushing it back to 2029. The levy was originally due to take effect in January 2027.
The decision contrasts sharply with Hong Kong, which approved its own crypto tax reporting law on Wednesday.
A Tax Proposal Every Crypto Investor Hates in South Korea
South Korea’s crypto gains tax is a 22% levy on annual crypto profits above 2.5 million won ($1,870). The rate combines a 20% national tax and a 2% local tax.
For example, an investor with 5 million won ($3,730) in gains would pay 550,000 won ($410). First introduced in 2020, the tax was originally due in 2022. Since then, lawmakers have postponed it three times amid investor backlash.
On Wednesday, Democratic Party leader Kim Min-seok proposed a new delay. The government accepted the request the next day, according to the Seoul Economic Daily.
Finance Minister Lee Hyung-il announced the decision at an emergency briefing.
“I take it seriously that, after three previous postponements, I am now announcing another deferral,” he said.
However, the change still requires approval from the National Assembly. The government said it would consult lawmakers to push for the two-year deferral.
Why Does Seoul Keep Delaying Its Crypto Tax?
Officials cited several reasons. First, the United States will not begin exchanging crypto tax information until 2029. Moreover, the tax framework needs refinement, including loss carryforward deductions.
South Korea is also preparing a new digital asset law. As BeInCrypto reported, the bill would set licensing rules for exchanges and stablecoin issuers.
Meanwhile, a joint public-private working group will draft detailed tax standards by the first half of 2028. Still, analysts say falling support among young investors was the decisive factor.
Critics argue the repeated delays damage the credibility of tax policy. By contrast, Hong Kong lawmakers on Wednesday passed a bill adopting the OECD’s Crypto-Asset Reporting Framework.
Under that law, crypto service providers in Hong Kong must start collecting user data in 2027. The city will then begin exchanging that information with partner jurisdictions in 2028.
As a result, two of Asia’s biggest crypto markets are now moving at very different speeds on taxation.
Source: BeInCrypto