Business · Markets · 2 hrs ago
South Korea delays crypto tax to 2029 and adds loss deductions
South Korea plans to postpone crypto income tax until 2029, two years later than planned.
The tax would apply to gains above an annual basic allowance of 2.5 million won, with the first tax return covering 2029 trades due in May 2030.
The government also plans to let investors carry losses forward for up to three years and subtract them from later gains.
For example, someone who loses 100 million won in one year and gains 50 million won the next would still have an overall loss, so would owe no tax on that gain.
Losses from before the tax starts in 2029 will not qualify, and the changes still need parliamentary approval.
The government plans to discuss raising the basic allowance and allowing investors to offset crypto losses against gains from other assets.
South Korea plans to delay taxation of cryptocurrency income from 2027 to 2029.
The government also plans to allow investors to carry losses forward for up to three years and deduct them from later gains.
The changes are intended to account for cryptocurrency’s high price volatility and prevent tax bills when investors have an overall loss.
The proposals require legislation, and the government plans to discuss them with the National Assembly.
The government will discuss further changes next year, including raising the basic deduction and allowing gains and losses across different investment assets to be combined.
- Who
- South Korea’s government plans the tax changes for cryptocurrency investors.
- What
- It plans to defer cryptocurrency income tax until 2029 and allow losses to be carried forward for up to three years.
- When
- The tax is planned to begin in 2029; the first reporting and payments for 2029 transactions are expected in May 2030.
- Where
- South Korea.
- Why
- The government cited cryptocurrency’s high price volatility and said loss deductions would let investors offset later gains.
This story does not have two clearly opposing sides.
Deputy Prime Minister Lee Hyung-il said the government would work with the National Assembly to defer cryptocurrency income tax for two years.
The deferred cryptocurrency tax and the loss carry-forward system are planned to take effect.
Investors are expected to file and pay tax on income from 2029 cryptocurrency transactions.
- Tax start
- 2029
- Loss carry-forward period
- Up to 3 years
- Existing basic deduction
- 2.5 million won per year
- Tax rate
- 22%, including local income tax
- First filing and payment
- May 2030 for 2029 transactions
What people are saying
Given the high price volatility of virtual assets, we took into account expert suggestions that it is reasonable to allow an exception to tax by combining gains and losses over a certain period.
Revising the tax system to allow gains and losses between stocks and virtual assets to be offset, as in major countries, is in line with global standards.