South Korea may postpone crypto tax regime for yet another year

South Korea might should delay the implementation of its crypto tax legal guidelines for a fourth time because it continues to face difficulties in creating a transparent tax construction for digital property because of unclear definitions and an absence of tax requirements for a lot of what cryptocurrency buying and selling entails.

South Korea’s plan to tax digital property has been postponed once more after already being postponed 3 times from 2022 to 2023, then to 2025 and now to January 2027. The nation’s first crypto tax regulation was handed in 2020, however not a lot progress has been made since then.

South Korea has postponed the implementation of the crypto tax regulation

In line with Kim Hole-rae, senior researcher on the Capital Market Analysis Institute, there are “core flaws” within the tax system, as reported in native media. These shortcomings embody an absence of definitions and tax requirements for points of digital asset earnings, comparable to airdrops, laborious forks, mining, staking, and even mortgage or rental earnings.

It’s also an issue that many of those transactions are past the attain of the federal government. There are presently no clear guidelines for taxation when customers commerce on international exchanges, use decentralized providers or conduct peer-to-peer transactions. The principles for non-residents, the best way to calculate crypto buy prices and when precisely tax obligations must be paid, are additionally unclear.

These gaps may result in an unfair system through which solely home forex customers are taxed, whereas others keep away from these duties. A consultant of the Ministry of Technique and Finance reportedly admitted that whereas they’ll hint massive transactions, small transactions of particular person traders, particularly these utilizing international platforms, stay troublesome to trace.

Attributable to these excellent points, some analysts consider that the implementation of the tax regulation will likely be delayed once more. Kim warned that if the federal government fails once more throughout this “grace interval,” public confidence in your complete crypto tax system may collapse.

The worldwide knowledge settlement

South Korea just lately joined the OECD’s Crypto-Asset Reporting Framework (CARF). It’s a multilateral settlement with 48 different nations to mechanically trade digital asset transaction knowledge from 2027.

Beneath this method, home exchanges comparable to Upbit and Bithumb will report consumer identification and transaction knowledge. In return, details about Koreans buying and selling on international exchanges will likely be shared with the Korean Nationwide Tax Administration (NTS). The federal government says this can assist remedy offshore loopholes that presently pose a problem to honest taxation.

Tax observers argue that South Korea should first resolve the structural points, comparable to readability on taxable occasions and guaranteeing that every one forms of crypto earnings are lined, as merely buying and selling info internationally is probably not sufficient to make sure a good and enforceable tax system.

Some have referred to as for a particular activity pressure or “tax TF” that may work with exchanges, purses and the tax authorities to construct the lacking infrastructure.

A big proportion of the South Korean inhabitants is concerned within the crypto market, which makes the dearth of readability and infrastructure harmful. Within the first half of 2025 alone, there have been roughly 10.77 million South Korean customers on home trade platforms.