South Korea confirmed its 22% crypto tax will take effect in January 2027 after multiple delays to the framework.
Crypto News
South Korea's Finance Ministry confirmed on May 7 that a long-delayed tax on cryptocurrency gains will take effect as scheduled on Jan. 1, 2027. Moon Kyung-ho, director of the ministry's income tax division, made the announcement at an emergency parliamentary forum on virtual asset taxation held at the National Assembly Members' Office Building in Seoul. The forum was co-hosted by Representative Park Soo-young of the People Power Party and the Korea Tax Policy Association.
Moon told attendees that the government will proceed with virtual asset taxation on the current timeline. It is the first direct public confirmation from the ministry that the 2027 start date is firm after multiple prior delays.
22% Rate To Cover 13M Investors
Under the Income Tax Act, profits from the transfer or lending of virtual assets will be classified as "other income" starting Jan. 1, 2027. Investors earning more than 2.5 million Korean won ($1,800) annually from crypto activity will face a combined 22% levy, made up of a 20% income tax and a 2% local surcharge. The rule is expected to apply to an estimated 13.26 million investors.
Moon said the National Tax Service is currently finalizing implementation guidance and has held multiple working-level meetings with five major exchanges, including Dunamu (Upbit), Bithumb, Coinone, Korbit, and Gopax, to prepare a draft notice. He added that the notice will be published for legislative review at some point in 2026, clarifying after the forum that his earlier use of the word "soon" was not intended to indicate an imminent release.
The crypto tax framework has been delayed twice before, with the original 2025 start date pushed to 2027 following political disagreement and industry concerns over exchange readiness and income threshold levels. The ruling People Power Party had also introduced a bill to scrap the tax entirely before the 2027 deadline.
The ministry’s May 7 statement signals it is proceeding independently of that legislative effort. The confirmation gives exchanges and investors a firmer deadline for compliance preparations, though formal guidance from the National Tax Service has not yet been released publicly.
Proposed changes to South Korea's Anti-Money Laundering (AML) rules have separately drawn criticism from the domestic crypto industry. DAXA, an industry body representing 27 registered Virtual Asset Service Providers, warned that a requirement to flag all overseas-linked transfers of 10 million won (around $6,900) or more as suspicious would push reported cases from around 63,000 annually to more than 5.4 million, making compliance operationally unworkable. The Financial Services Commission and Financial Intelligence Unit published the proposed amendments for public comment on March 30, with submissions accepted through May 11 and final rules expected in July.
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