South Korea considers crypto tax delay as five exchanges meet officials

South Korea has moved closer to another debate over delaying its planned 22% cryptocurrency income tax, with officials preparing to meet five major exchanges on October 20 after a ruling-party lawmaker introduced legislation that could push implementation toward 2029.

According to an October 18 report by Yonhap News Agency, representatives from Upbit, Bithumb, Coinone, DigitalX and Gopax are expected to attend the consultation alongside executives from the Digital Asset Exchange Alliance, known as DAXA.

The meeting follows concerns from trading platforms that tax rules for several cryptocurrency activities remain unclear, leaving limited time to prepare reporting systems before the scheduled January 1, 2027, start.

The government has not announced another postponement. Its tax authority continues preparing implementation guidelines, while lawmakers consider a proposal linking the start of taxation to international cryptocurrency transaction-data sharing.

South Korea’s crypto tax faces new calls for a delay

The October 20 meeting will bring together representatives of major trading platforms and senior government officials to discuss preparations for taxing cryptocurrency income.

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 participate.

Their discussions follow an October 6 parliamentary hearing during which Finance Minister Lee Hyoung-il said the government would gather views from affected groups before proceeding with cryptocurrency taxation.

Exchange representatives have raised concerns about how the planned rules will apply to different activities and whether their systems can provide the required information.

An industry official told Yonhap that standards for several transaction types had not been finalized, while the remaining preparation period was becoming increasingly difficult.

The official said there was support within the industry for postponing implementation. South Korea first introduced its cryptocurrency income tax framework through amendments to the Income Tax Act in 2020.

Lawmakers subsequently postponed implementation three times, moving the effective date through several planned starts before settling on January 2027.

Under the existing schedule, qualifying income generated from cryptocurrency transfers and lending will become taxable from January 1.

Investors will receive an annual basic deduction of 2.5 million won, with a combined 22% tax applying to qualifying income above that allowance. The rate consists of a 20% national income tax and an additional local income tax.

The proposed tax concerns taxable income, not the entire value of cryptocurrency held in a wallet or the gross amount passing through an exchange.

New tax bill could push implementation toward 2029

The latest legislative proposal introduces a new approach to deciding when cryptocurrency taxation should begin.

On October 16, Democratic Party lawmaker Park Min-gyu introduced an amendment to the Income Tax Act that would tie implementation to international cryptocurrency transaction-data exchanges. The bill, numbered 2221923, was submitted with 14 sponsoring lawmakers, according to its published legislative record.

Its central proposal would change the effective date to January 1 of the second year following the year in which cryptocurrency transaction information is first exchanged under the relevant international tax-reporting framework.

If the first qualifying information exchange occurs during 2027, the proposed formula would place implementation on January 1, 2029. The legislation does not simply replace the current date with an unconditional January 2029 deadline. Its timing depends on when the specified information-sharing requirement is met.

Meanwhile, the proposal refers to the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework, or CARF. The framework is designed to help participating tax authorities exchange information about relevant cryptocurrency transactions involving residents of other jurisdictions.

In the bill’s explanatory statement, Park argued that South Korean authorities may be able to obtain transaction information from domestic exchanges while facing difficulties collecting comparable data from foreign trading platforms.

He warned that implementing the tax before international reporting systems become sufficiently established could create unequal treatment between domestic and overseas exchange users. The bill proposes allowing additional time to obtain and verify transaction data.

However, the legislative record identifies the measure as introduced, with no completed parliamentary approval recorded as of October 19. The existing January 2027 implementation date therefore remains unchanged.

Exchanges seek clearer rules for staking and DeFi

Trading platforms have identified several cryptocurrency activities that present practical questions for tax reporting.

According to the industry concerns described by Yonhap, staking rewards, airdrops, hard forks and decentralized finance transactions require more detailed treatment before exchanges can calculate taxable income consistently.

Staking generally involves committing cryptocurrency to support blockchain network operations and receiving rewards. Industry representatives have questioned whether certain rewards should be treated as income from lending digital assets or compensation for participating in network validation.

Airdrops raise separate questions because recipients may receive tokens without buying them through a conventional exchange transaction. Hard forks can result in holders receiving assets associated with a newly created blockchain network.

DeFi arrangements may involve token deposits, borrowing, lending and transactions through software that does not operate like a conventional centralized exchange.

The current legal framework identifies income from transfers and lending as taxable categories, but industry participants say the treatment of these specific activities needs clarification.

Another concern involves cryptocurrency held in private wallets or traded through foreign platforms, where domestic exchanges may not have complete transaction histories.

Investors who move assets between wallets and exchanges can generate records across multiple services, complicating the calculation of acquisition costs and taxable gains.

Industry representatives have questioned whether the proposed system can apply consistently when information is available for some transactions but incomplete for others.

They have raised concerns about the absence of loss carryforward deductions and the treatment of cryptocurrency income compared with other investment assets.

Earlier this month, crypto.news reported November tax guidance following questions raised during a parliamentary hearing.

The National Tax Service said it was preparing detailed standards and working with exchanges on reporting procedures.

Tax authorities continue preparing for January 2027

Despite the renewed political pressure, the National Tax Service is proceeding with preparations for the existing legal schedule.

During an October 13 parliamentary hearing, tax commissioner Lim Gwang-hyeon said the agency expected to issue cryptocurrency taxation guidance around November.

Lawmakers told officials to continue administrative preparations unless the National Assembly formally changes the effective date.

Under the present framework, income earned during 2027 would generally be included in the first relevant annual filing period in May 2028.

A proposed delay would require legislative approval before that schedule could change. Pressure for postponement was already building before Park introduced his latest bill.

In September, a petition seeking another delay reached the 50,000 signatures required for parliamentary review.

The petition did not automatically change the law, but it placed another request for postponement before lawmakers.

Previous legislation on digital assets has addressed the proposed Digital Asset Basic Act alongside the approaching cryptocurrency tax.

The Financial Services Commission is working on the government version of that legislation, with consultations expected to continue after the parliamentary audit period.

Reported disagreements include possible limits of 15%–20% on major shareholders’ ownership of cryptocurrency exchanges and whether won-denominated stablecoins should initially require majority ownership by banks in issuing consortia.

Those conditions remain under discussion and have not been established as final requirements.

According to Yonhap, financial authorities could complete a government draft as early as late October before beginning consultations with ruling-party lawmakers.