South Korea Postpones Crypto Gains Tax to 2029, Fourth Delay Since 2020

South Korea has delayed its 22% tax on cryptocurrency gains for a fourth time, pushing the start date to 2029. The levy was originally scheduled to take effect in January 2027.

Finance Minister Lee Hyung-il announced the decision at an emergency briefing on Thursday, one day after Democratic Party leader Kim Min-seok formally proposed the postponement. The government accepted the request within a day, according to the Seoul Economic Daily.

"I take it seriously that, after three previous postponements, I am now announcing another deferral," Lee said. His acknowledgment of the pattern is notable, yet it does not change the outcome; the tax remains uncollected eight years after its introduction. The deferral still requires approval from the National Assembly, and the government said it would consult lawmakers to secure the two-year delay.

What would the tax have charged investors?

The proposed levy combines a 20% national tax and a 2% local tax on annual crypto profits above 2.5 million won, roughly $1,870. An investor with 5 million won — about $3,730 — in annual gains would have paid 550,000 won, or approximately $410.

Put in household terms, a trader earning twice the threshold would surrender just over a tenth of that profit to the state. The tax was first introduced in 2020 with a 2022 start date. Lawmakers have postponed it three times since, amid sustained investor backlash. In short, Seoul has now spent most of a decade promising a tax it has never collected.

Why does Seoul keep delaying?

Officials cited several operational reasons. The United States will not begin exchanging crypto tax information until 2029, leaving South Korea without reciprocal data flows in the interim. The tax framework also needs refinement, including loss carryforward deductions, which would let investors offset losses against future gains.

Separately, South Korea is preparing a new digital asset law that would set licensing rules for exchanges and stablecoin issuers. A joint public-private working group will draft detailed tax standards by the first half of 2028 — a timeline that conveniently ends just before the new start date.

Officials framed the delay as technical housekeeping; analysts identified a simpler driver. Falling support for the tax among young investors was, in their view, the decisive factor. The government's stated reasons are real, but they are also reasons that existed when the earlier start dates were set. Critics argue the repeated delays damage the credibility of tax policy itself, since investors can reasonably assume any future deadline may also slip.

How does this compare with Hong Kong?

The contrast with Hong Kong is stark. On Wednesday, the same day Kim proposed the delay, Hong Kong lawmakers passed a bill adopting the OECD's Crypto-Asset Reporting Framework.

Under that law, crypto service providers in Hong Kong must begin collecting user data in 2027, with information exchanges with partner jurisdictions starting in 2028. Hong Kong will therefore be exchanging tax data with foreign authorities at least a year before South Korea collects its first won in crypto tax.

Two of Asia's largest crypto markets are now moving at visibly different speeds. Seoul has legislated a tax and deferred it four times; Hong Kong has legislated reporting rules and attached fixed dates to each stage. The divergence creates a structural question for regional compliance planning: firms operating across both jurisdictions will face mandatory data collection in one market and no tax collection in the other until at least 2029.

The National Assembly's vote on the deferral is the next checkpoint, followed by the working group's tax standards due by mid-2028 — the earliest moment at which Seoul's stated commitment to a 2029 launch can be tested against a written framework.