South Korea is moving forward with plans to tax cryptocurrency profits starting January 1, 2027, suggesting the government is unlikely to delay the measure for a fourth time.
The proposed framework would impose a combined tax of up to 22% on annual crypto gains above 2.5 million won, roughly equivalent to $1,740.
The levy was originally scheduled to begin in January 2022 but was postponed to 2025. In December 2024, lawmakers approved another delay, pushing the implementation date back by two additional years to 2027.
“We are proceeding with the cryptocurrency taxation plan from next year as scheduled,” Deputy Prime Minister Koo Yun-cheol told lawmakers during a July 29 meeting of the National Assembly’s Finance and Economy Planning Committee.
Under the current rules, income generated from selling or lending digital assets would be treated as separate “other income.” Investors would receive a yearly deduction of 2.5 million won, with profits above that amount subject to a 20% national tax rate, or 22% after including local income tax, according to the National Tax Service.
Kim Sang-hoon from the opposition People Power Party criticized the proposal, pointing to the lack of loss carryforward provisions that would allow investors to offset future gains with previous losses. He warned that the policy could drive trading activity toward overseas exchanges, decentralized finance platforms, and peer-to-peer markets.
Kim also argued that implementation should be postponed until the OECD’s Crypto-Asset Reporting Framework is fully operational to improve international tax reporting and enforcement.
Despite the government’s push, the tax plan could still be overturned. A bill introduced in March seeks to remove the crypto tax entirely by excluding digital asset income from the Income Tax Act.
The proposal was reviewed by the Finance and Economy Planning Committee on July 29 before being sent to a subcommittee. Unless lawmakers repeal or delay the measure, the tax rules are set to take effect on January 1, 2027.
Koo said any decision to eliminate the tax would require a broader evaluation of South Korea’s capital markets taxation system, including whether cryptocurrency profits should eventually be treated as capital gains.
