Blue House Backs Another Delay to Crypto Income Tax, Citing Youth Sentiment and Lack of Readiness

South Korea’s Blue House has decided to again delay taxation on income from virtual assets, or cryptocurrencies, which had been due to take effect in January. The final policy will be set after consultations between the government and the ruling party, and a review of related legislation in the National Assembly.

A Blue House official told News1 on October 25 that the tax would be postponed out of respect for young people’s efforts to build assets. The official added that discussions between the government and the ruling party would proceed in that direction.

Under the current income tax law, annual income from the transfer or lending of virtual assets would be taxed starting next year after a 2.5 million won ($1,800) deduction. The remaining amount would be subject to a 22% tax rate, including local income tax. The implementation date has already been postponed three times.

Another delay is being considered because of inadequate tax infrastructure and fairness concerns involving users of overseas exchanges. In particular, the US is scheduled to join the Crypto-Asset Reporting Framework, or CARF, only from 2029, raising concern that the tax burden could be concentrated on users of domestic exchanges.

The biggest obstacle is that the US does not provide South Korea with tax information, the Blue House official said. If the tax is implemented as scheduled, authorities would have to track information on US exchanges individually.

Lawmakers in the ruling party are also pushing a bill to delay the start of crypto taxation until 2029. The Blue House plans to finalize its position after consultations with the ruling party and the government once the parliamentary audit ends.