South Korea appears increasingly likely to postpone its planned tax on virtual-asset income once again, even though the levy is currently scheduled to begin in January. The Blue House, the country’s presidential office, has moved toward supporting another deferral, according to the source report, although consultations with the ruling party and a parliamentary review are still pending.
The debate centers on a 22% tax, including local income tax, that would apply from next year to annual gains from virtual-asset transfers and lending above a 2.5 million won deduction. Officials cited gaps in tax readiness, fairness issues tied to overseas exchange users, and sensitivity to younger investors’ efforts to build assets as key reasons for reconsidering the timetable.
Tax plan faces a possible fourth postponement
Under South Korea’s current Income Tax Act, income from virtual-asset transfers and lending is due to become taxable from January. The measure has already been delayed three times, and the latest discussion points to another pushback rather than immediate enforcement.
A Blue House official said the administration had postponed the tax in part out of respect for young people trying to accumulate assets, and that internal discussions have been moving in that direction again. The report indicates the presidential office is now leaning toward a further delay, but not that the change has been finalized.
Officials point to infrastructure and cross-border fairness issues
Government officials also argued that the tax system is not yet fully prepared to administer the levy smoothly. One concern is whether authorities have adequate infrastructure to collect and verify data needed to tax virtual-asset income consistently.
Another issue involves equal treatment between users of domestic and overseas trading platforms. Officials raised fairness concerns related to investors using foreign exchanges, especially because the United States is not expected to join the Crypto-Asset Reporting Framework, or CARF, until 2029.
U.S. exchange data seen as a practical obstacle
According to the report, the largest operational problem is that U.S. tax information is not currently provided to South Korea. If the tax were introduced as planned, authorities would need to track data from U.S. exchanges individually, creating a significant administrative burden.
That limitation has become part of the case for waiting longer before launching the tax. In the government’s view, starting the levy before international reporting channels are in place could undermine both enforcement and perceptions of fairness.
Ruling party seeks delay until 2029
The ruling party is pushing legislation that would move the start of virtual-asset taxation to 2029. That proposal aligns with the broader argument that enforcement should wait until reporting arrangements and domestic preparations are more complete.
A final government position has not yet been settled. The report said the outcome will be determined after the annual parliamentary audit and further consultations, followed by parliamentary review of the related bill. For now, the next confirmed step is continued political and legislative coordination over whether the January start date will be postponed again.
Source: en.bloomingbit.io