Finance ministry moves to delay crypto gains tax to 2029

The finance ministry said Thursday it will seek to postpone taxation of virtual asset income by two years, pushing back a levy due to start next year and moving the government's target to 2029.

Finance Minister Lee Hyung-il announced the plan at a briefing at the Government Complex Seoul. He said his ministry would negotiate the delay with the National Assembly rather than impose the tax as scheduled.

The government pointed to two reasons for waiting. Information exchange on crypto assets with the United States under the Crypto-Asset Reporting Framework does not begin until 2029, so taxing domestic gains first could put Korean investors at a disadvantage. Seoul also expects the legal footing of the industry to change substantially once a digital asset law is enacted.

"We will pursue the rationalization of the tax system and the expansion of tax infrastructure, and speed up the enactment of the Digital Asset Act so that the sound growth of the digital asset industry is no longer delayed," Lee said.

Alongside the delay, the ministry will work with the National Assembly on allowing losses on virtual assets to be carried forward for three years, a rule already recognized in the United States, Britain and other major markets. Officials cited the asset class's sharp price swings and proposals from experts that gains and losses be netted over a period.

A public-private working group on digital asset taxation will begin meeting shortly to discuss tax standards for various types of transactions and ways to make filing easier, with reform proposals due by the first half of next year and legislation headed to the National Assembly's regular session in 2027. Detailed tax rules are to be published in the first half of 2028.

The ministry said it would also work with the Financial Services Commission on the digital asset law and on protections for users of digital assets.