South Korea plans to begin on January 1, 2027 the taxation of gains from cryptocurrencies, maintaining the current schedule despite calls from the industry and lawmakers for a new postponement. Lee Hyoung-il, nominated to head the Ministry of Finance and Economy, defended the implementation in responses sent to Parliament this Sunday (13).
Under current rules, gains resulting from the sale or lending of digital assets will be classified as “other income”. The national rate will be 20% on annual profit exceeding the basic deduction of 2.5 million won, reaching 22% when the local tax is taken into account.
Lee said that crypto taxation is necessary as a matter of fairness in relation to other investments already subject to taxes. According to him, more detailed operational rules should be defined by the National Tax Service by the end of this year.
The charge will apply to transactions carried out starting in January 2027. Because the assessment considers the annual result, the first declaration and payment of the tax will occur during the tax period of May 2028.
For cryptocurrencies acquired before the effective date, the National Tax Service provides that the acquisition cost considered for tax purposes will be the higher of the price actually paid and the market value determined on December 31, 2026. The measure seeks to avoid taxation on appreciation accumulated before the start of the new regime.
Exchanges and opposition push for new postponement
Implementation still faces resistance. The Digital Asset eXchange Alliance (DAXA), which represents the main South Korean exchanges, argues that standardized systems are lacking for data sharing between platforms and tax authorities, especially in transactions involving external wallets, airdrops and other on-chain records.
Another point of criticism is the absence of loss offsetting between different tax years. Under the current model, losses recorded in one year cannot be carried forward to reduce the tax on any future profits.
The People Power Party, the main opposition force, presented proposals to change the schedule. One of them provides for postponing taxation until January 1, 2030, while other initiatives advocate eliminating the tax. Until one of these proposals is approved, however, current legislation keeps the start of collection in January 2027.
