South Korea is set to introduce a combined tax rate of 22% on annual cryptocurrency gains exceeding 2.5 million won, or about $1,740, starting January 1, 2027. The plan signals a firm stance from the government, which has postponed the tax three times already.
Initially slated for January 2022, the measure was delayed until 2025, and in December 2024, further postponed until 2027. Deputy Prime Minister Koo Yun-cheol confirmed the schedule during a July 29 meeting of the National Assembly’s Finance and Economy Planning Committee.
How the tax will work
Under the new system, profits from trading or lending crypto will be classified as “other income” and taxed at 20% nationally, or 22% including local taxes. Investors will get an annual deduction of 2.5 million won before the tax applies.
Opposition voices, including Kim Sang-hoon from the People Power Party, have raised concerns. He pointed to the lack of loss carryforwards—where investors can offset losses against future gains—as a key flaw. Without this, he warned, investors may shift activity to overseas centralized or decentralized platforms.
A legislative battle ahead
The tax is not yet set in stone. A bill introduced in March aimed to remove crypto income from the Income Tax Act, effectively abolishing the measure. The issue was discussed in the Finance and Economy Planning Committee on July 29 and has been referred to a subcommittee. If no changes are made, the tax will take effect as planned.
Koo indicated that any changes to the tax would require a broader review of how crypto profits are treated under South Korea’s capital-market tax regime. For now, the government remains on course.