South Korea delays cryptocurrency income tax implementation again

South Korea's presidential office has decided to delay the taxation on cryptocurrency income, originally set to take effect on January 1 next year. This decision follows discussions about postponing the implementation due to insufficient preparations and public sentiment among younger individuals. The government had initially planned to tax virtual asset income based on a 2020 revision to the income tax law, but this measure has already been delayed three times. The presidential office's decision comes amid considerations that the U.S. will join the Crypto-Asset Reporting Framework (CARF) in 2029. CARF allows tax authorities worldwide to collect users' residency and transaction information from crypto asset service providers and share this data. Concerns have been raised that the delay in U.S. participation could lead to taxation being focused solely on users of South Korean exchanges, given the size of the domestic market. Additionally, a revision bill has been proposed within the ruling Democratic Party to start crypto taxation in 2029, while the opposition People Power Party is also advocating for a delay. The law is expected to be revised during tax bill reviews in November.

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