South Korea’s government has proposed a two-year delay to its planned 20% crypto income tax, pushing the start date from January 2027 to January 2029. The announcement, made on November 5, 2026, also includes a proposal to allow investors to carry forward losses for three years to offset future gains. The changes require legislative approval, and the current timetable remains in place pending new laws.
The government’s plan follows a request from the Democratic Party on November 4, just weeks before the scheduled tax implementation. Party leader Kim Min-seok emphasized the need for a comprehensive framework under the Digital Asset Basic Act before imposing the tax. He highlighted preparations such as overseas transaction information exchange, system verification, and taxpayer guidance as essential steps.
The proposed delay aligns with a legislative proposal by Rep. Kim Sang-hoon in August 2026, which also suggested moving the start date to January 2029. The government cited expected crypto transaction information exchange with the United States from 2029 and anticipated changes under digital-asset legislation as reasons for seeking additional preparation time.
Under the current National Tax Service framework, crypto income from transfers and lending would be taxed at a combined rate of 22%, including local income tax. The calculation applies to income after deducting acquisition costs and associated expenses, with an annual basic deduction of 2.5 million won. The proposed loss carryforward would provide investors with more flexibility in managing their taxable income.