South Korea may postpone crypto tax regime for yet another year

South Korea may need to postpone the implementation of its crypto tax laws for the fourth time as it continues to face difficulties making a clear tax structure for digital assets due to unclear definitions and a lack of tax standards for much of what cryptocurrency trading entails.

South Korea’s plan to begin taxing virtual assets has once again been postponed after already being delayed three times from 2022 to 2023, then to 2025, and now to January 2027. The country’s first crypto-tax law was passed in 2020, but not much progress has been made since. 

South Korea has postponed its crypto tax law implementation 

According to Kim Gap-rae, a senior researcher at the Capital Market Research Institute, there are “core deficiencies” in the taxation framework, as reported in local media. These deficiencies include a lack of definitions and tax standards for aspects of virtual asset income types like airdrops, hard forks, mining, staking, and even lending or rental income. 

It’s also an issue that many of these transactions lie outside the government’s reach. There are currently no clear rules for taxation when users trade on overseas exchanges, use decentralized services, or transact peer-to-peer.  Also, rules for non-residents, how to calculate the acquisition cost for crypto, and exactly when tax liabilities should come due are unclear. 

These gaps could lead to an unfair system in which only domestic exchange users are taxed, while others evade those duties. A representative from the Ministry of Strategy and Finance reportedly admitted that while they can trace large trades, small transactions by individual investors, especially those using foreign platforms, remain hard to track. 

Because of these unresolved issues, some analysts believe that the tax law implementation will be postponed again. Kim warned that if the government fails again during this “grace period,” public trust in the entire crypto-tax system may collapse. 

The global data agreement 

South Korea recently signed onto the OECD’s Crypto-Asset Reporting Framework (CARF). It is a multilateral agreement with 48 other nations to automatically exchange virtual-asset transaction data starting in 2027. 

Under this system, domestic exchanges like Upbit and Bithumb will report user identity and transaction data. In return, information about Koreans trading on overseas exchanges will be shared with Korea’s National Tax Service (NTS). The government says this will help solve offshore loopholes that currently pose a problem to fair taxation. 

Tax observers argue that South Korea first needs to solve the structural issues, like clarity on taxable events and ensuring all crypto income types are covered, because simply trading information internationally may not be enough to guarantee a fair and enforceable tax system. 

Some have called for a dedicated task force or “tax TF” that would work with exchanges, wallets, and the tax authority to build the missing infrastructure. 

A large percentage of South Korea’s population is involved in the crypto market, making the lack of clarity and infrastructure dangerous. Just in the first half of 2025, there were about 10.77 million South Korean users on domestic exchange platforms.