The South Korean government will postpone the implementation of taxation on cryptocurrency income, originally scheduled for next year, by another two years to 2029. The government plans to delay implementation to secure overseas transaction tax information and improve the tax system, while also pursuing a measure allowing cryptocurrency investment losses to be carried forward for three years. It also plans to establish tax standards for new types of transactions, including stablecoins and perpetual futures.
The Ministry of Finance and Economy announced the plans to adjust the implementation schedule for cryptocurrency income taxation and improve the tax system during a briefing chaired by Lee Hyoung-il, deputy prime minister and minister of finance and economy, at the Government Complex Seoul on Nov. 5.
The government has decided to pursue a two-year postponement of cryptocurrency income taxation, originally scheduled to take effect in 2027, until 2029 through consultations with the National Assembly. The decision reflects concerns that beginning taxation without sufficient access to overseas transaction information could place domestic investors at a relative disadvantage.
“We take seriously the fact that, after postponing the implementation of taxation three times, we must now announce another delay,” Lee said. “We will prepare to ensure that the tax system is implemented without disruption in 2029.”
The key priority is securing overseas transaction information through the Crypto-Asset Reporting Framework (CARF), an automatic exchange system for crypto-asset tax information. Considering that the exchange of cryptocurrency tax information with the United States will begin in 2029, the government plans to monitor progress in establishing the international information exchange framework and strengthen its ability to link and analyze domestic and overseas tax data.
The government also plans to introduce a measure allowing cryptocurrency investment losses to be carried forward for three years, taking into account the high price volatility of digital assets. Under the current system, cryptocurrency income is classified as other income, for which loss carryforwards are generally not permitted.
“This does not mean that the loss carryforward system will operate for only three years, but rather that the period during which losses can be carried forward will be set at three years,” said Cho Man-hee, director general of the Tax and Customs Office at the Ministry of Finance and Economy.
For example, losses incurred in 2029 could be deducted against profits earned through 2032. However, losses already realized through sales before the implementation of taxation would not be eligible for carryforward deductions.
The government will also revise tax standards for new types of transactions following the enactment of the Digital Asset Act. Stablecoins and perpetual futures traded on overseas cryptocurrency exchanges are among the main areas under review.
When a U.S. dollar-denominated stablecoin is used as a means of payment, the transaction is considered a disposal under tax law and is therefore subject to taxation. For won-denominated stablecoins, the government plans to review the taxation framework, taking into account how they are regulated under the Digital Asset Act and the possibility of price fluctuations. Taxation of perpetual futures will be discussed later, as their tax treatment may depend on the Financial Services Commission's legal determination.
The government will also clarify the standards for taxation of income from cryptocurrency lending, as the current system lacks clear definitions and criteria for determining what constitutes lending.
To discuss these issues, the government will launch a public-private joint working group on digital asset taxation, bringing together experts, industry representatives and officials from relevant ministries. It plans to develop measures to improve the system by the first half of 2027 and submit the necessary legislative amendments to the National Assembly during its regular session that year. Detailed taxation standards will be announced in the first half of 2028.
“We will do our utmost to carefully refine the taxation standards and enforcement systems to ensure fair taxation,” Lee said.
