South Korea delays cryptocurrency tax plan, gains until 2028 tax-exempt

If South Korea's proposal to delay cryptocurrency taxation by two years is approved, gains accrued through the end of 2028 will be tax-exempt even if sold after 2029. Cryptocurrencies acquired before the tax implementation and held continuously will be recognized at the higher of their market value at the end of 2028 or their actual purchase price. This allows holders to avoid selling before the tax takes effect to realize unrealized gains. If the purchase price exceeds the market value at the end of 2028, gains and losses from later sales will be based on the actual purchase price, allowing for capital losses if prices decline before taxation. However, losses from sales before the tax takes effect will not qualify for carryforward deductions. A plan is in place to permit losses incurred after the tax implementation to be deducted from gains in the following three tax years. The basic deduction of 2.5 million won and the 22% tax rate will remain unchanged, while overseas financial account reporting and inheritance and gift taxes will still apply.

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