South Korea to delay virtual asset taxation until 2029

The South Korean government has announced plans to postpone the taxation of virtual asset income by two years, moving the implementation date from January 2025 to 2029. Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il stated that the delay aims to ensure tax equity and establish a stable regulatory foundation.

Key reasons for the postponement include the upcoming implementation of the Crypto-Asset Reporting Framework (CARF) in 2029, which will facilitate information exchange with the United States. This will allow authorities to effectively tax investors using foreign exchanges, preventing a disadvantage for domestic exchange users. Additionally, the government intends to use this period to enact a Digital Asset Basic Act to provide a more robust legal framework.

To mitigate the impact of high market volatility, the government will introduce a loss carryforward system. This will allow investors to carry forward losses for up to three years to offset future gains. A public-private joint working group will be established to refine taxation methods for various transaction types, including stablecoins and foreign exchange derivatives, with legislative proposals expected by the 2027 National Assembly session.