Key facts
- South Korea's cryptocurrency tax will commence on January 1, 2027.
- The tax rate will be 22% on annual gains exceeding KRW 2.5 million ($1,740).
- Gains will be classified as 'other income' under the Income Tax Act.
- An opposition bill seeking to abolish the crypto tax provisions is under consideration.
- The government aims to collect initial tax returns in May 2028 for 2027 income.
South Korea's Deputy Prime Minister Koo Yun-cheol has confirmed that the nation's cryptocurrency tax will be implemented on January 1, 2027, ending speculation about further delays. The tax, initially legislated in 2020 and previously postponed multiple times, will impose a 22% rate on annual virtual asset gains exceeding KRW 2.5 million (approximately $1,740). This income will be treated as 'other income' under the Income Tax Act, with a 20% national rate and a 2% local income tax.
Lawmakers are debating whether to allow investors to offset losses against future gains, a provision that opposition lawmaker Kim Sang-hoon argues is crucial to prevent activity from moving to overseas exchanges and decentralized platforms. Kim also suggested delaying the tax until the OECD's Crypto-Asset Reporting Framework is fully operational. A separate opposition bill introduced in March 2026 aims to abolish the crypto tax entirely.
Koo acknowledged that a shift to capital-gains treatment, which would permit loss offsets, would necessitate a broader review of South Korea's capital market tax structure and would likely occur after the new system launches and operational data is gathered. The confirmation of the tax comes amid volatility in South Korea's equity markets and a competitive drive for global capital, highlighted by Samsung's significant AI deal.