South Korea to Implement 22% Tax on Cryptocurrency Gains Above $1,740 Starting January 2027

South Korea plans to implement a 22% combined tax on cryptocurrency gains exceeding 2.5 million won (approximately $1,740) starting January 1, 2027. Despite previous delays since 2022, Deputy Prime Minister Koo Yun-cheol confirmed the government is pushing forward with the plan. However, critics like Kim Sang-hoon warn the lack of loss carryforwards could drive investors to offshore platforms, while a pending legislative bill seeks to abolish the tax entirely.

South Korea crypto tax implementation

• ▪Deputy Prime Minister Koo Yun-cheol stated on July 29, 2026, that South Korea is pushing forward with the plan to tax cryptocurrency starting in 2027 as scheduled.
• ▪South Korea's cryptocurrency tax was originally scheduled for January 2022, delayed to 2025, and further postponed to 2027 by a December 2024 amendment.
• ▪South Korea plans to begin taxing cryptocurrency gains starting January 1, 2027, signaling that the government does not intend to postpone the measure for a fourth time.

Tax rate structure

• ▪South Korea's cryptocurrency tax framework provides investors with an annual deduction threshold of 2.5 million won, which is approximately $1,740.
• ▪South Korea's cryptocurrency tax will impose a 20% national tax rate, which rises to a 22% combined rate when including local income tax.
• ▪Under South Korea's proposed framework, income from transferring or lending cryptocurrency will be taxed separately as "other income."

Investor offshore migration risk

• ▪Kim Sang-hoon argued that South Korea's cryptocurrency taxation should wait until the OECD's cross-border Crypto-Asset Reporting Framework is fully operational.
• ▪Critics warn that South Korea's proposed cryptocurrency tax rules do not allow for loss carryforwards, which may hurt domestic demand.
• ▪Kim Sang-hoon of the People Power Party warned that the absence of loss carryforwards could push investors to shift activity to overseas centralized exchanges, decentralized platforms, and peer-to-peer markets.

Legislative repeal efforts

• ▪A bill introduced in March 2026 aims to abolish South Korea's cryptocurrency tax by removing cryptocurrency income from the Income Tax Act.
• ▪Deputy Prime Minister Koo Yun-cheol stated that removing cryptocurrency income from the Income Tax Act would require a broader review of South Korea's capital-market tax regime.
• ▪The bill to abolish South Korea's cryptocurrency tax was taken up by the National Assembly's Finance and Economy Planning Committee on July 29, 2026, and referred to a subcommittee.