The presidential office has decided to postpone taxation on cryptocurrency income that had been set to take effect in January next year.
"The discussion has moved toward delaying implementation of the crypto tax," a presidential office official said on the 25th. The government originally decided to tax virtual asset income through a 2020 revision of the Income Tax Act, but the measure has been deferred three times. It was scheduled to take effect on Jan. 1 next year, but the presidential office chose another postponement, citing incomplete preparations for collection and public opinion among young adults.
Under the revised Income Tax Act, annual income from transfers or lending of virtual assets would be subject to a combined rate of 22%, covering other income tax and local income tax, after a basic deduction of 2.5 million won.
The decision to push back the start date was reportedly influenced in particular by the fact that the United States will join the Crypto-Asset Reporting Framework (CARF) only from 2029. Under CARF, tax authorities around the world collect information on users' countries of residence and their transactions from virtual asset service providers and exchange that data with one another. If participation by the U.S., which has a large trading market, is delayed, taxation could fall disproportionately on users of domestic exchanges.
Lawmakers in the ruling party have also taken this into account, submitting a revision bill that would start the crypto tax in 2029. The People Power Party is also calling for a delay, so the law is expected to be amended during the tax review in November.
The presidential office is expected to hold a government-party consultative meeting as soon as this month's parliamentary audit of government agencies concludes, and to reach a final conclusion on crypto taxation. Kim Min-seok, leader of the Democratic Party of Korea, earlier said the issue "needs to be settled this year."