South Korea Confirms Crypto Tax Implementation Starting January 2027 with 22% Rate

May 7, 2026

South Korea implements a 22% tax rate on virtual asset gains starting January 1, 2027, affecting 13.26 million crypto traders. The tax applies only to annual income exceeding 2.5 million Korean won ($1,800). Initially scheduled for 2025, the measure was postponed twice. The National Tax Service works with five leading exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax to develop tax collection systems.

South Korea crypto tax implementation

▪The South Korean virtual asset tax was initially scheduled for 2025 but was postponed twice due to political differences and market unpreparedness.
▪There are around 13.26 million crypto traders in South Korea.
▪Director Moon Kyung-ho of the income tax department in the Ministry of Economy and Finance confirmed that South Korea will proceed with virtual asset taxation as scheduled in January 2027.
▪The article about South Korea's crypto tax implementation was published on May 7, 2026.
▪The South Korean National Tax Service has initiated the final processes towards the implementation of the virtual asset tax.
▪The draft notice outlining the guidelines for South Korea's virtual asset tax implementation is anticipated to be released sometime in 2026.
▪The South Korean government will implement a 22% tax on profits from virtual assets starting January 1, 2027.

Twenty-two percent tax rate

▪Under South Korea's Income Tax Act, gains from the sale or borrowing of virtual currency will be considered as other income.
▪South Korea's 22% virtual asset tax rate consists of 20% national income tax and 2% local income tax.
▪South Korea's virtual asset tax policy applies to domestic transactions as well as cross-border transactions involving at least one Korean resident.

Retail trader exemptions

▪South Korean traders with virtual asset gains below 2.5 million Korean won will not be taxed under the retail trader exemption.
▪South Korea's virtual asset income tax will only apply to traders whose annual income exceeds 2.5 million Korean won ($1,800).

Exchange compliance preparations

▪South Korean exchange platforms and investors have around 18 months to adjust to the virtual asset tax implementation.
▪Negotiations are underway between the South Korean National Tax Service and digital currency exchanges to develop effective tax schemes, with emphasis on information-sharing and withholding systems.
▪The South Korean National Tax Service is working with South Korea's five leading digital currency exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax.

Trader response strategies

▪Many Korean crypto traders are exploring foreign exchange strategies to mitigate their exposure to the 2027 tax measure.

Germany crypto tax overhaul

▪Under German tax law, profits from Bitcoin or other crypto assets held for over one year are exempt from taxation under the Haltefrist rule.
▪German Finance Minister Lars Klingbeil stated that the crypto tax change will yield an additional €2 billion (around $2.3 billion).
▪The German government is planning to eliminate its favorable one-year tax break period for crypto assets beginning in 2027.
▪German crypto holdings of less than one year are taxed at progressive rates up to 45%, plus the solidarity surcharge.