South Korea Proposes New Delay for 22% Crypto Gains Tax Until 2029

South Korea has announced a proposal to delay the implementation of its 22% cryptocurrency gains tax from 2027 to 2029. This measure, which requires legislative approval, aims to allow investors to carry forward losses for three years and is focused on income from selling or lending virtual assets such as Bitcoin and Ethereum.

This latest proposal represents a further deferral of the country’s crypto-tax regime, which was initially planned for 2022. The decision contrasts with recent developments in Hong Kong, which has moved forward with its own crypto tax reporting law.

The proposed tax is a 22% levy on annual crypto profits exceeding 2.5 million won (approximately $1,870), consisting of a 20% national tax and a 2% local tax. For instance, an investor with 5 million won in gains would owe around 550,000 won.

Democratic Party leader Kim Min-seok suggested the new delay, which was accepted by the government shortly thereafter. Finance Minister Lee Hyung-il acknowledged the seriousness of the situation, stating that this is the fourth postponement since the tax was first introduced.

Officials cited several reasons for the delay, including the fact that the United States will not start exchanging crypto tax information until 2029, and the need for refinement in the tax framework. Additionally, a new digital asset law is being prepared, which will set licensing rules for exchanges and stablecoin issuers.

Despite the government's rationale, analysts suggest that declining support among young investors has played a significant role in the repeated delays, raising concerns about the credibility of the tax policy.