South Korea meets exchanges as calls to delay crypto tax grow

South Korea's finance officials will sit down with the country's five biggest crypto exchanges on Tuesday, Oct 20, as pressure builds to postpone a crypto tax that is due to start in January 2027. The meeting, first reported by Yonhap and picked up by Cointelegraph, comes days after a lawmaker from the ruling party filed a bill that would push the start date back by about two years.

Who is in the room

• Government: Kwon Dae-young, first vice minister of finance and economy, and Yoo Young-jun, director general for digital financial policy at the Financial Services Commission.
• Industry: the heads of Upbit, Bithumb, Coinone, DigitalX and Gopax, plus executives from DAXA, the exchanges' joint self-regulatory alliance.

Yonhap describes the session as a follow-up to a promise by the finance minister, made during this month's parliamentary audit, to gather views widely before the tax takes effect.

What the tax would do

Under a 2020 change to the Income Tax Act, profits from selling or lending virtual assets count as "other income". Once the annual gain exceeds a 2.5 million won basic deduction, the remainder is taxed at a combined 22%, national and local income tax together. The levy has been delayed three times. Unless parliament acts again, it applies from Jan 1, 2027, and the National Tax Service has said it is ready to publish the detailed rules around November.

Why the industry wants more time

An exchange official told Yonhap that standards for different transaction types are still not final and that time to build the infrastructure is running short. The open questions include how to treat staking rewards, airdrops, hard forks and DeFi, how to get records from overseas exchanges and private wallets, and the lack of loss carry-forward. A Seoul Economic Daily survey of 30 industry officials and experts found 28 (93.3%) favour a delay, most often to 2029.

The bills on the table

Park Min-gyu of the Democratic Party, the first ruling-party lawmaker to do so, filed a bill on Oct 16 that would start the tax on Jan 1 of the second year after Korea first swaps crypto data under the OECD's Crypto-Asset Reporting Framework (CARF). With the first exchange expected in 2027, that means 2029. Opposition People Power Party lawmakers have filed bills to delay the tax or scrap it. The parliamentary tax subcommittee is expected to debate them next month.

CARF is the same reporting standard behind Australia's draft crypto reporting bill, and Korea is already tightening oversight, recently blocking 27 unregistered exchanges. Elsewhere, Latvia is overhauling how it taxes crypto. For how platforms like Upbit differ from DeFi venues, see our guide to centralized vs decentralized exchanges.