South Korea Delays Crypto Income Tax to 2029, Adds Loss Carryforward

Overseas data and loss carryforward

The key issue is access to foreign transaction data through the Crypto-Asset Reporting Framework (CARF). Because information exchange with the United States on crypto tax data is due to begin in 2029, the government will track the build-out of the international system and strengthen its ability to link and analyze domestic and foreign tax data.

Crypto income is currently classed as other income, which generally does not allow loss carryforward. Given the volatility of digital assets, the government wants to change that. Tax bureau chief Cho Man-hee clarified that the three years is the period over which losses can be carried, not a limit on how long the system operates. A loss booked in 2029, for example, could offset gains made up to 2032. Losses already locked in by selling before taxation starts will not qualify.

Stablecoins and perpetual futures

The government will also set tax rules for new transaction types arising from the Digital Asset Act. Using a dollar stablecoin as a means of payment is treated as a transfer under tax law and is therefore taxable. For won-denominated stablecoins, the tax treatment will be reviewed in light of how the Digital Asset Act regulates them and their potential price movements. Whether perpetual futures on overseas exchanges are taxed depends on a legal judgment by the Financial Services Commission, so that will be discussed later. Rules on income from lending crypto, where the definition is currently unclear, will also be specified.

A public-private working group of experts, industry and ministries will handle these issues. The government aims to produce reform proposals by the first half of 2027, submit amendments to the regular National Assembly session that year, and publish detailed tax standards in the first half of 2028.