South Korea plans to tax cryptocurrency gains above 2.5 million won ($1,740) at a combined rate of up to 22% starting Jan. 1, 2027, signaling it will not delay the measure a fourth time. Deputy Prime Minister Koo Yun-cheol told lawmakers the plan will move forward as scheduled, even as a bill to abolish the tax works through parliament and an opposition lawmaker warns it could push investors offshore.
South Korea's government has signaled it will not delay its long-postponed crypto tax a fourth time, with an up to 22% combined tax on annual crypto gains exceeding 2.5 million won ($1,740) set to take effect Jan. 1, 2027. Deputy Prime Minister Koo Yun-cheol told lawmakers the plan will move forward as scheduled, even as a bill to abolish the tax works through parliament and opposition criticism mounts over its design.
A repeatedly postponed tax
The tax was originally due to take effect in January 2022, but it had been postponed until 2025. A December 2024 amendment then delayed its introduction by another two years, to the start of 2027. Koo made clear that would not happen again, telling lawmakers at a July 29 meeting of the National Assembly's Finance and Economy Planning Committee, according to CoinDesk: "We are pushing forward with the plan to tax [cryptocurrency] starting next year as scheduled."
How the tax will work
Under the current framework, income from transferring or lending crypto will be taxed separately as "other income", according to Korea's National Tax Service. Investors will receive an annual deduction of 2.5 million won, with gains above that threshold subject to a 20% national tax rate, or 22% including local income tax.
Opposition warns of capital flight
However, Kim Sang-hoon of the opposition People Power Party criticized the absence of loss carry-forwards and warned that investors could shift activity to overseas centralized exchanges, decentralized platforms and peer-to-peer markets. He argued taxation should wait until the OECD's cross-border Crypto-Asset Reporting Framework is fully operational.
A bill introduced in March would abolish the tax by removing crypto income from the Income Tax Act, though its passage is not guaranteed. The measure was referred to a subcommittee on July 29, and unless lawmakers repeal or further delay the provisions, the tax takes effect Jan. 1, 2027. Koo said any repeal would require a broader review of South Korea's capital-market tax regime to determine whether crypto profits should be treated as capital gains.
Source: CoinDesk
Trading involves risk.
Risk Disclaimer
