South Korea is facing renewed calls to delay its planned 22% cryptocurrency income tax, with government officials set to meet representatives of five major exchanges on October 20. A new bill introduced by a ruling-party lawmaker could push the tax’s implementation to 2029, depending on when international cryptocurrency transaction-data sharing begins.
According to Yonhap News Agency, representatives from Upbit, Bithumb, Coinone, DigitalX and Gopax are expected to attend the meeting alongside members of the Digital Asset Exchange Alliance (DAXA).
The meeting comes as exchanges warn that several tax rules remain unclear, leaving limited time to prepare their systems before the scheduled January 1, 2027, launch.
The government has not announced another delay. Meanwhile, tax authorities are preparing guidance for November as lawmakers consider whether implementation should depend on international data-sharing arrangements.
South Korea faces renewed pressure to delay crypto taxation
The October 20 meeting will bring together exchange representatives and senior government officials to discuss preparations for the upcoming tax rules.
Kwon Dae-young, first vice minister of finance and economy, and Yoo Young-jun, a senior digital finance policymaker at the Financial Services Commission, are among the officials expected to attend.
During an October 6 parliamentary hearing, Finance Minister Lee Hyoung-il said the government would gather feedback from affected groups before moving forward with cryptocurrency taxation.
Exchange representatives have raised concerns about how the rules will apply to different types of transactions and whether platforms can prepare the required reporting systems in time.
One industry official told Yonhap that standards for several cryptocurrency activities had yet to be finalized, making the remaining preparation period increasingly difficult.
South Korea first introduced its cryptocurrency income tax framework through amendments to the Income Tax Act in 2020. Lawmakers have since postponed implementation three times, with the latest schedule setting January 2027 as the start date.
Under the current plan, qualifying income from cryptocurrency transfers and lending will be subject to taxation from January 1, 2027.
Investors will receive an annual basic deduction of 2.5 million won. Qualifying income above that amount will face a combined tax rate of 22%, consisting of a 20% national income tax and a 2% local income tax.
The tax applies to qualifying income, not the total value of cryptocurrency held by an investor or the entire amount traded through an exchange.
New bill could move the tax deadline to 2029
On October 16, Democratic Party lawmaker Park Min-gyu introduced an amendment to the Income Tax Act that would link cryptocurrency tax implementation to international transaction-data sharing.
The proposal, registered as bill No. 2221923, was submitted with 14 other lawmakers as sponsors.
Under the bill, taxation would begin on January 1 of the second year after the year in which cryptocurrency transaction information is first exchanged under the relevant international reporting framework.
If the first qualifying exchange of information takes place in 2027, the proposed rule would move the start date to January 1, 2029.
However, the bill does not establish January 2029 as an unconditional deadline. The date would depend on when the specified international data-sharing requirement is met.
The proposal refers to the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework, known as CARF. The framework is designed to help participating tax authorities exchange information about cryptocurrency transactions involving residents of other jurisdictions.
In the bill’s explanatory statement, Park argued that South Korean authorities could obtain transaction information from domestic exchanges while facing greater difficulties collecting comparable data from overseas platforms.
He said implementing the tax before international reporting systems are sufficiently established could result in different treatment for investors using domestic and foreign exchanges.
The proposed delay would give authorities more time to collect and verify transaction information.
As of October 19, the legislation had been introduced but had not completed the parliamentary approval process. The existing January 2027 start date therefore remains in place.
Exchanges want clearer rules for staking, airdrops and DeFi
Crypto exchanges have identified several activities that could complicate tax calculations and reporting.
These include staking rewards, airdrops, hard forks and decentralized finance transactions. Industry representatives say clearer guidance is needed to determine how these activities should be treated under the tax framework.
Staking involves committing cryptocurrency to support blockchain operations in exchange for rewards. Exchanges have questioned how certain rewards should be classified, including whether they fall under income from lending digital assets or payments for network validation.
Airdrops create different questions because users may receive tokens without purchasing them through a conventional transaction. Hard forks can also result in holders receiving new assets when a blockchain splits into separate networks.
Decentralized finance, or DeFi, adds further complexity through activities such as lending, borrowing, token deposits and transactions conducted through blockchain-based applications.
Although the existing framework identifies cryptocurrency transfers and lending as taxable categories, exchanges say the treatment of these specific activities requires further clarification.
Another challenge involves assets held in private wallets or traded through overseas platforms. Domestic exchanges may not have complete records of those transactions, making it harder to calculate acquisition costs and taxable gains accurately.
Investors who move cryptocurrency between wallets and multiple exchanges may also have records spread across several services.
Industry representatives have raised concerns about how the system will handle incomplete transaction histories, losses and the differences between cryptocurrency income and income from other investment assets.
Tax authorities continue preparing for January 2027
Despite the calls for another postponement, South Korea’s National Tax Service continues to prepare for the existing implementation date.
During an October 13 parliamentary hearing, tax commissioner Lim Gwang-hyeon said the agency expected to issue detailed cryptocurrency tax guidance around November.
Lawmakers instructed officials to continue their preparations unless the National Assembly formally changes the deadline.
Under the current schedule, income earned during 2027 would generally be reported during the relevant annual filing period in May 2028.
A delay would require legislative approval. Neither the new bill nor a public petition automatically changes the existing law.
In September, a petition seeking another postponement reached the 50,000 signatures required for parliamentary review. The petition added to growing pressure on lawmakers but did not change the implementation date.
The upcoming tax debate is also taking place alongside discussions over South Korea’s proposed Digital Asset Basic Act.
The Financial Services Commission is working on the government’s version of the legislation, with further consultations expected after the parliamentary audit period.
Among the issues under discussion are possible ownership limits of 15% to 20% for major shareholders of cryptocurrency exchanges and a proposal that banks hold majority ownership in consortia issuing won-denominated stablecoins.
Neither proposal has been finalized as a binding requirement.
According to Yonhap, financial authorities could complete a government draft of the digital asset legislation as early as late October before beginning consultations with ruling-party lawmakers.
For now, South Korea’s cryptocurrency tax remains scheduled for January 1, 2027. The October 20 meeting and Park’s proposed amendment could influence the debate, but a postponement will depend on further government decisions and legislative action.
