Deputy Prime Minister and Finance Minister Lee Hyoung Il said the plan at a briefing in Seoul, saying the government would work with the National Assembly to revise the implementation schedule.
The move would delay taxation originally scheduled to begin on Jan. 1, 2027, marking the fourth postponement since the system was introduced through legislation in 2020.
Under the existing framework, annual gains exceeding 2.5 million won (about US$1,860) from virtual asset transactions would be subject to a 20 percent income tax, rising to 22 percent including local income tax.
The government cited gaps in overseas transaction reporting and the need to establish a more comprehensive regulatory framework as the main reasons for the additional delay.
The Ministry of Finance and Economy said automatic exchanges of cryptocurrency transaction information with the United States would begin in 2029, raising concerns that earlier taxation could disadvantage domestic trading platforms while overseas transactions remain harder to track.
The government also pointed to pending digital asset legislation, which could change the regulatory treatment of cryptocurrencies and require adjustments to the tax framework.
Alongside the postponement, Seoul plans to introduce a three-year loss carryforward provision, allowing investors to deduct trading losses from taxable gains arising over the following three years.
The measure, which also requires legislative approval, would address concerns that investors could face taxes on profits in one year despite substantial losses in another.
Authorities will establish a joint public-private working group involving government agencies, industry representatives and tax experts to develop detailed taxation standards and improve reporting systems.
The group will review taxation rules for different types of virtual asset transactions and ways to strengthen information sharing between domestic and overseas platforms.
The government aims to prepare proposed reforms by the first half of 2027, submit necessary legislative amendments during that year's regular parliamentary session and announce detailed taxation guidelines in the first half of 2028.
The latest move follows three previous delays. Cryptocurrency taxation was initially scheduled for 2022 before being pushed back to 2023, 2025 and 2027 amid concerns over investor protection and inadequate tax infrastructure.
The decision provides additional preparation time for cryptocurrency exchanges and investors, although repeated postponements could raise fresh questions about the consistency and predictability of the government's tax policy.
Lee admitted concerns over another delay but maintained that the principle of taxing income would remain unchanged, with the additional preparation period intended to ensure the system takes effect in 2029.
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