South Korea Crypto Tax Set for 2027 as Political Fight Heats Up

A bill introduced in March would abolish the tax entirely by removing crypto income from the Income Tax Act. The National Assembly’s Finance and Economy Planning Committee took up the bill on July 29 and referred it to a subcommittee. Unless lawmakers repeal or further delay the provisions, the tax becomes law on Jan. 1, 2027.

Koo said a repeal would require a broader review of South Korea’s capital-market tax regime. The review would need to determine whether crypto profits should be treated as capital gains rather than “other income,” a change that would affect the tax rate and the availability of loss offsets.

The political uncertainty matters for South Korea’s crypto exchanges – Upbit, Bithumb, Coinone, Korbit, and Gopax – which dominate local trading volumes. A tax that drives retail traders toward overseas platforms or decentralized venues could erode their fee revenue and liquidity. The Korean premium on bitcoin, a spread between local and global prices, often reflects restricted arbitrage and retail demand. A capital flight scenario would compress that premium.

The OECD’s Crypto-Asset Reporting Framework, which Kim referenced, is designed to prevent tax evasion by standardizing information exchange between jurisdictions. It is not yet operational. If South Korea introduces the tax before the framework is live, enforcement against offshore activity will rely on existing bilateral agreements, which are patchy.

Without a repeal or another delay, the tax takes effect in 15 months. The subcommittee’s next meeting on the repeal bill has not been scheduled.