A Tax Plan That Just Keeps Getting Delayed
South Korea’s long-promised crypto tax policy is hitting another wall. The government has postponed its digital asset taxation framework for the fourth time-now targeting January 2027. The country originally passed its first crypto-tax law back in 2020, but “core deficiencies” in the rules continue to stall implementation. The latest holdup exposes a deeper issue: South Korea still lacks the basic legal definitions needed to tax modern crypto activity.
Missing Definitions Break the System
According to Kim Gap-rae, a senior researcher at the Capital Market Research Institute, the country’s tax framework suffers from “core deficiencies”, especially in defining what exactly counts as taxable crypto income.
South Korea still has no clear tax structure for major categories such as airdrops, hard forks, staking rewards, mining income, and even lending or rental income tied to digital assets.
The government also struggles with how to tax peer-to-peer transactions, overseas exchange trades, and DeFi usage, since much of this activity falls outside state visibility.
A System at Risk of Collapsing
These gaps create the risk of a deeply unfair tax system-one where domestic exchange users pay taxes, while anyone using foreign or decentralized platforms may avoid them entirely.
Analysts now warn that 2027 may still not be enough time. Kim warned that if the government fails again during this “grace period,” public trust in the entire crypto-tax framework could collapse.
South Korea Turns to the Global Data-Sharing Pact
In an effort to plug loopholes, South Korea has joined the OECD’s Crypto-Asset Reporting Framework (CARF) alongside 48 countries.
Beginning in 2027, domestic exchanges such as Upbit and Bithumb must report user identities and transaction data. In exchange, overseas exchanges will share information about Korean nationals trading abroad, helping the National Tax Service track hidden crypto activity.
Officials hope CARF will close offshore evasion, but tax observers argue that South Korea still lacks clear definitions of taxable events, making enforcement shaky even with global data sharing.
A Country of 10 Million Crypto Users Still Without Clear Rules
With 10.77 million South Koreans trading crypto in the first half of 2025 alone, the absence of a clear tax system presents major financial-policy risk. Experts argue that South Korea needs a dedicated tax task force working directly with exchanges, wallet providers, and regulators to build missing infrastructure.
Until then, the crypto-tax question lingers-delayed, disputed, and increasingly controversial-as the digital economy grows faster than the laws meant to govern it.
