It seems that South Korea's controversial crypto tax will face its fourth extension, which may mean that local crypto investors will have to wait another two years before they are required to start paying taxes on the returns from their digital assets.

According to local media reports, the South Korean President's Office is inclined to postpone the introduction of this crypto tax. The tax is currently scheduled to take effect on January 1, 2027.

This tax proposal intends to impose a tax rate of 22% on crypto earnings exceeding 2.5 million Korean won (approximately $1,888) per year, which includes a 20% income tax and an additional 2% local tax.

However, an increasing number of legislators and the Korean cryptocurrency industry are calling on the government to postpone the imposition of a cryptocurrency tax, on the grounds that Korea is not yet ready to implement such taxation.

One major concern is that governments do not have the capability to effectively monitor cryptocurrency transactions conducted on overseas exchanges.

There are concerns from the outside world that if South Korea proceeds with taxation without an effective international reporting system, it will put South Korean cryptocurrency exchanges and their users at a disadvantage.

Postponed again to 2029?

South Korea initially approved a tax on cryptocurrencies in 2020, with implementation originally planned to begin in January 2022.

However, the implementation of this tax has been postponed three times since then. It was first delayed from 2022 to 2023, then to 2025, and finally set to take effect in 2027.

Now it seems that it may be postponed again to 2029.

Earlier this month, Democratic Congressman Park Min-kui proposed a bill that links the implementation of crypto taxes to international information sharing agreements.

The bill will postpone the taxation of cryptocurrencies until two years after the first exchange of cryptocurrency transaction information under the Organization for Economic Co-operation and Development (OECD)’s “Framework for Reporting on Crypto-Assets” (_CARF).

CARF is designed to assist tax authorities in tracking cross-border cryptocurrency transactions.

The United States is expected to join the system in 2029. There are concerns that, before that time, it may be difficult for South Korean authorities to obtain transaction data involving American trading platforms.