South Korean Lawmaker Seeks Delay to Crypto Tax, Citing Gaps in Data and Loss Rules

Concerns over uneven enforcement

Min said the biggest immediate problem is the gap between domestic and overseas exchanges. South Korean authorities can verify trading records from local platforms, he said, but do not yet have a system to obtain transaction data from foreign exchanges.

If taxation starts before that gap is addressed, Min argued, users of domestic exchanges would effectively face the tax while traders using offshore venues could be harder to track. In his view, that would create a fairness problem and could encourage investors to move activity خارج South Korea’s regulated local market.

Losses cannot yet be carried forward

Min also pointed to the lack of a loss carryforward rule for digital-asset investments. He said the current plan could tax investors even when they have no net profit over time.

To illustrate the issue, he described an investor who loses 10 million won in one year and gains 10 million won the next. Even though the two-year result would be zero overall, the current tax structure would still impose a 22% tax on gains above the 2.5 million won basic deduction, producing a tax bill of 1.65 million won.

He said digital-asset losses should be allowed to offset future gains for at least five years. According to Min, the former financial investment income tax included a five-year carryforward provision, and a similar approach is needed in a market where short-term trading is common.

Tax should follow legal and industry rules

Min said the broader institutional framework for the digital-asset sector should be established before taxation takes effect. In particular, he called for the Basic Digital Asset Act to be enacted first so that the market has a defined legal structure and operating rules.

He argued that introducing taxes before the industry environment and legal framework are in place would be inappropriate. He also said companies need time to prepare their own tax-reporting and foreign-exchange compliance systems before the new regime begins.

Delay, not cancellation

Min said he is not seeking to scrap digital-asset taxation altogether. Instead, he called for a delay while the government builds the systems needed to collect and analyze overseas trading data, introduces a loss carryforward deduction and allows market participants time to prepare.

He also said any bill to postpone the tax should include a clear implementation schedule rather than an open-ended deferral. The government, he said, should set staged preparation tasks on a six-, 12- and 18-month basis. For now, the next confirmed step is his call for a review of the current timeline ahead of the planned rollout next year.