Postpone virtual asset taxation to 2029 and push for 3-year loss deduction

South Korea’s Ministry of Economy and Finance will seek to delay cryptocurrency income taxation by two years, from January 1, 2027 to 2029, and introduce a three-year carryforward deduction for crypto investment losses, requiring legislative amendments to the Income Tax Act. Under current law, crypto gains from transfers or lending are taxed as miscellaneous income at 20% plus local income tax for a combined 22% rate, after a 2.5 million won annual deduction. The ministry said it will consult with the National Assembly on the deferral. The move matters because it postpones the first effective tax burden on Korean crypto investors and would let losses offset future gains, softening the tax hit during downturns. Watch for the National Assembly’s amendment timetable and whether the loss carryforward is enacted alongside the delay.