South Korea's 22% Crypto Tax Set for Jan. 2027 After Years of Delay

The opposition People Power Party continues to oppose the measure and has proposed amendments to remove crypto income from the Income Tax Act altogether. Party lawmakers have argued that taxing retail cryptocurrency investors while most retail stock investment gains remain exempt creates unequal treatment.

Earlier committee discussions raised concerns over the tax design. During the July 29 hearing, People Power Party lawmaker Kim Sang-hoon questioned the absence of rules allowing investors to carry forward trading losses. He warned that the framework could encourage traders to move activity from domestic exchanges such as Upbit, Bithumb, Coinone and Korbit to overseas centralized exchanges, decentralized finance platforms or peer-to-peer markets.

Responding during the hearing, Koo said moving virtual assets into South Korea's capital gains tax framework would require a broader review of the country's financial tax system. He added that authorities could consider revisions after gaining experience with the tax's operation.

Separate from the tax package, South Korea is also preparing a wider regulatory framework for digital assets. The Financial Services Commission told the National Assembly in late July that it is working with the ruling Democratic Party on a consolidated Digital Asset Basic Act. The proposed legislation would combine 10 pending digital asset and stablecoin bills into one framework covering stablecoin issuance, exchanges, disclosures, internal controls and system resilience. Several issues remain unresolved, including ownership requirements for issuers of won-backed stablecoins and possible ownership limits for major cryptocurrency exchanges.

The National Tax Service has established a dedicated digital asset unit and continues preparing implementation guidance for the upcoming crypto tax, according to previous government statements.

South Korea has also begun clarifying how other blockchain-based assets could be taxed. In June, the Ministry of Economy and Finance said tokenized stocks should generally be treated as securities rather than virtual assets because their economic characteristics resemble conventional securities despite using blockchain technology. The ministry said taxation could begin under existing securities tax rules once the Financial Services Commission formally determines that tokenized stocks qualify as securities. Officials also indicated that overseas-issued tokenized stocks could still fall under South Korean tax rules depending on the rights attached to the assets.

Tax authorities have been strengthening information-sharing arrangements with overseas counterparts. Alongside participation in the OECD's Crypto-Asset Reporting Framework, officials have previously said they are expanding cooperation with foreign tax agencies to improve oversight of cross-border digital asset transactions.

Unless lawmakers approve another postponement or pass the pending repeal proposal before the end of 2026, South Korea's 22% tax on annual cryptocurrency gains above 2.5 million won will take effect on Jan. 1, 2027, ending several years of repeated delays.