As the South Korean government has yet to develop infrastructure or publish specific guidelines, the future cryptocurrency tax system may once again face delays.
Industry sources familiar with the matter told local media that despite years of planning, the country still lacks the institutional and regulatory clarity needed to implement the framework by January 2027.
South Korea originally passed the law in 2020, but its implementation was delayed three times until 2027 as a result of political disagreements, technical hurdles and pressure from investors.
Industry insiders say South Korea lags behind other major economies such as Japan and Germany, and regulators have already taken steps to bring cryptocurrencies into the mainstream tax chain and provide legal clarity.
Kim Kabre, a senior researcher at the Korea Capital Market Research Institute, was quoted as saying, “Postponing taxes three times is an unprecedented step that is rarely seen in major economies in the world.”
South Korea’s tax framework is very similar to Japan’s, and cryptocurrencies are expected to be taxed at around 20%, similar to how capital gains on stocks are applied.
South Korea plans to impose a separate 22% tax on crypto assets profits for individuals who earn more than 2.5 million won annually from digital asset transactions.
While attending the Asia Digital Finance Summit on November 4, Kintsugi Technologies CBO Harry Kim suggested that South Korea’s actual burden could be as high as 25%, depending on how different types of crypto income are ultimately classified under the law.
South Korea’s virtual currency tax has not yet been finalized
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However, the government has yet to draft a fully developed administrative and technical framework, even after agreeing to a third postponement last December.
At the time, the Democratic Party of Korea advocated raising the annual tax threshold to 50 million won, but this proposal failed to gain support, and instead a motion was filed asking for the entire law to be postponed.
The proposal initially met with resistance from Democrats, who argued that the tax should begin in 2025, but after extensive negotiations they agreed to postpone it until 2027.
Industry experts like Kim are now concerned that almost a year has passed since the latest postponement and no progress has been made on the groundwork.
At the same time, there is no dedicated task force in place, which is common in most developed countries when implementing new tax laws.
Additionally, Kim highlighted other pressing concerns, including that the government has yet to define how income from staking, mining, airdrops, hard forks, and loans will be taxed. As a result, many experts believe a fourth postponement could be on the horizon.
“If public opinion begins to support further postponement, it could provoke strong enough tax resistance to jeopardize future implementation,” Kim said.
Others, such as Park Joo-cho, a researcher at the Korea Institute for Fiscal Policy, warn that unresolved issues in the bill could lead to legal disputes after it is finally implemented.
South Korea to curb virtual currency
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South Korea is increasingly becoming a major cryptocurrency retail market, with the Financial Services Commission reporting more than 10.77 million verified exchange users as of mid-2025, roughly one-fifth of the country’s total population.
Regulators are already focused on tax enforcement and plan to strengthen compliance by not only taxing digital assets but also introducing an electronic seizure system for tax evaders.
There are also discussions about allowing crypto startups to register as venture companies eligible for tax incentives and government incentives.
Much of the regulatory development in recent months has been led by pro-crypto President Lee Jae-myung, who took office in June of this year and pledged to support crypto innovation, stablecoin legislation, and broader digital finance reform.
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