South Korea Moves Forward With 2027 Virtual Asset Tax Rollout, Sets 22% Levy On Crypto Gains Above KRW 2.5M

South Korea is preparing to move ahead with its planned tax on virtual asset gains, with implementation expected to begin in January next year. The National Tax Service is working with the country’s five major virtual asset operators — Upbit, Bithumb, Coinone, Korbit and Gopax — to finalize detailed collection and reporting standards. 

Under the current Income Tax Act, profits above KRW 2.5 million will be taxed at a combined rate of 22% from January 1 next year, including 20% income tax and a 2% local income tax.

The Ministry of Economy and Finance has rejected criticism that the crypto tax is unfair or that it amounts to double taxation following the scrapping of the financial investment income tax. Moon Kyung-ho, who heads the ministry’s Income Tax Division, said at an emergency forum on May 7 that the virtual asset tax should take effect as scheduled on Jan. 1, 2027, arguing that income should be taxed where it is generated. 

He added that the legal basis for taxing virtual assets was established earlier, through legislation passed in December 2020, and should not be treated as dependent on the separate financial investment income tax regime.

Crypto Tax Framework: Fairness, Asset Classification Standards, And Tax Enforcement Infrastructure

Moon Kyung-ho also said it would be inconsistent to exempt virtual assets while continuing to tax other forms of financial income, noting that major shareholders, overseas stocks and unlisted shares are already subject to taxation. 

Addressing concerns about classification, he said virtual assets are treated under International Financial Reporting Standards as intangible assets, making miscellaneous income the most practical tax category. He said that approach can also capture earnings from staking, airdrops and similar activities without creating legal ambiguity.

The ministry further dismissed concerns over loss carryforwards, saying such treatment is not yet fully available for other financial products either. It also rejected claims of double taxation, explaining that value-added tax does not apply to virtual assets themselves but to brokerage services provided by exchanges. 

Moon Kyung-ho said the National Tax Service has already built the necessary electronic infrastructure and will continue expanding monitoring capacity through overseas account reporting rules and the Crypto-Asset Reporting Framework. Detailed guidance on issues such as staking and other transaction types is expected to be published through future tax notices.

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