South Korea intends to begin taxing cryptocurrency earnings on January 1, 2027, indicating that authorities are preparing to move ahead rather than postpone the policy for another year.
The proposed tax system would charge up to 22% on yearly crypto profits exceeding 2.5 million won, or about $1,740.
The cryptocurrency tax was first scheduled to launch in January 2022 but was delayed until 2025. A legislative amendment passed in December 2024 extended the postponement by another two years, moving the planned start date to 2027.
Deputy Prime Minister Koo Yun-cheol confirmed the government’s position during a July 29 meeting of the National Assembly’s Finance and Economy Planning Committee, stating that the country would proceed with crypto taxation next year as planned.
Under the existing proposal, profits from cryptocurrency sales or lending would be categorized as “other income” and taxed separately. Investors would be allowed a yearly deduction of 2.5 million won, while gains beyond that amount would face a 20% national tax, bringing the total burden to 22% after local taxes are added, according to the National Tax Service.
The proposal has faced opposition from lawmakers, including Kim Sang-hoon of the People Power Party. He criticized the lack of loss carryforward rules and warned that traders could move their activities to foreign centralized exchanges, decentralized platforms, or peer-to-peer markets to avoid the impact.
Kim also argued that the tax should not begin until the OECD’s Crypto-Asset Reporting Framework is fully implemented to create a stronger global reporting system.
However, the policy is still subject to political approval. A bill introduced in March seeks to scrap the cryptocurrency tax by removing digital asset income from the Income Tax Act.
The proposal was reviewed by the committee on July 29 and forwarded to a subcommittee for further consideration. Unless lawmakers cancel or delay the measure, the tax will take effect at the beginning of 2027.
Koo said removing the tax would require a wider assessment of South Korea’s capital gains framework and a decision on whether cryptocurrency profits should ultimately be classified under capital gains taxation.
