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The South Korean government announced on Thursday a proposal to further delay the introduction of cryptocurrency capital gains tax, moving its effective date to 2029. This marks the fourth postponement since the regulation was written into law in 2020. The initiative, presented by the Ministry of Finance and Economy, also includes a significant amendment to tax regulations: the ability to offset realized losses with profits from the following three years.
Why it matters
The decision responds to a technical rather than political necessity. According to Minister Lee Hyeong-il, the current delay is due to the lack of reliable data on purchase prices for transactions executed on foreign exchanges. The government intends to use the additional two years to collect and analyze these records in coordination with information exchange under the OECD’s Crypto-Asset Reporting Framework (CARF), which will become fully operational in 2029. Once data from the United States is available, South Korean authorities will be able to tax investors using American platforms on par with those in the domestic market.
The numbers
The proposed tax rate remains at 22% on net income derived from digital assets. A basic annual deduction of 2.5 million won (approximately $1,869) is confirmed, below which income is not taxed. The main novelty concerns loss management: while current law allows offsetting only in the year the loss occurs, the new proposal extends this period to three subsequent fiscal years (from 2029 to 2032 for losses in the first year of application). Full operational details are expected in the first half of 2028.
What remains unclear
The actual delay to 2029 is not yet definitive, as it requires approval of the amendment to the Income Tax Act by the National Assembly in the coming weeks. Furthermore, the validity of the new deadline depends on the timely start of data exchange with the United States. Several technical points also remain open: for example, it is not yet clear whether losses are deductible in case of a “wash sale” (immediate resale of the same asset) and how transaction data from personal wallets or unregulated foreign exchanges will be verified.
Sources: Cointelegraph, Bitcoin Magazine, Block Media.
This article is for informational purposes only and does not constitute financial advice or an investment recommendation.
* Content created with the assistance of artificial intelligence systems.