South Korea’s crypto tax rollout could face another delay, experts warn

South Korea’s upcoming tax regime for cryptocurrencies could once again face delays, as the government is yet to lay down the infrastructure or publish concrete guidelines.

Industry officials familiar with the matter told local media that despite years of planning, the country still lacks the systems and regulatory clarity needed to implement the framework by January 2027.

South Korea initially passed the law in 2020, but its rollout has been delayed on three occasions to 2027, as a result of political disagreements, technical hurdles, and pressure from investors.

According to industry officials, South Korea is falling behind other major economies like Japan and Germany, where regulators have already taken steps to bring crypto into the mainstream tax net and provide legal clarity.

“Postponing taxation three times is an unprecedented move rarely seen among major global economies,” Kim Kab-lae, a senior research fellow at the Korea Capital Market Institute, was quoted as saying.

South Korea’s tax framework is quite similar to that of Japan, where cryptocurrencies are expected to be taxed at around 20%, similar to how capital gains on stocks are implemented. 

South Korea plans to tax crypto gains at a separate 22% rate for individuals earning more than 2.5 million won annually from digital asset trading. 

During a Nov. 4 appearance at the Asia Digital Finance Summit, Kintsugi Technologies CBO Harry Kim suggested that the actual burden in South Korea could reach as high as 25%, depending on how different types of crypto income are eventually classified under the law.

South Korean crypto tax yet to be finalised

However, the government is yet to draft a fully developed administrative and technical framework, even after agreeing to the third delay in December last year.

At the time, the South Korean Democratic Party was pushing for an increase in the annual tax threshold to 50 million won, but the proposal failed to gain support, and a motion to delay the entire law was tabled instead.

Initially, the proposal faced resistance from the Democratic Party, where lawmakers insisted that taxation should begin in 2025, but they later agreed on the deferral to 2027 after broader negotiations.

Industry experts like Kim are currently concerned that even after almost a year since the latest deferral, there has been no progress in laying the groundwork.

At the same time, there is no dedicated task force in place, which is typically the case across most advanced economies when implementing new tax laws.

Further, Kim highlighted other pressing concerns, such as how the government has yet to define how income from staking, mining, airdrops, hard forks, and lending will be taxed. As such, many experts believe a fourth delay could be on the horizon.

“If public sentiment begins to support another delay, it could trigger tax resistance strong enough to jeopardize future implementation,” Kim said.

Others, like Korea Institute of Public Finance researcher Park Joo-cheo, warn that unresolved issues within the draft law could spark legal disputes once taxation is finally enforced.

South Korea to keep crypto in check

South Korea is increasingly becoming a key retail crypto market, with the Financial Services Commission reporting over 10.77 million verified exchange users as of mid-2025, which marks roughly one-fifth of the country’s total population.

Regulators have already focused on tax enforcement, and beyond taxing digital assets, they plan to tighten compliance by implementing electronic seizure systems for tax evaders.

There have also been discussions around allowing crypto startups to register as venture companies eligible for tax benefits and government incentives.

Much of the regulatory development in recent months has been led by pro-crypto President Lee Jae-myung, who came into power in June this year and has pledged to support crypto innovation, stablecoin legislation, and broader digital finance reforms.

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