The South Korean government plans to implement a long-delayed tax on cryptocurrency earnings on January 1, 2027. According to the plan, cryptocurrency income exceeding 2.5 million won (approximately $1,740) annually will be subject to a 22% compound tax rate. Officials stated that this measure will not be delayed a fourth time and will be implemented as planned.
Tax Details and Legal Process
Under the new regulations, income from the transfer or lending of cryptocurrencies will be taxed separately under the “other income” category. Investors will be able to benefit from an exemption of 2.5 million won per year; gains exceeding this amount will be taxed at a total rate of 22%, consisting of a 20% national income tax and an additional local tax. According to the framework announced by the South Korean National Tax Service, losses cannot be carried forward to the following year.
Political Debates and Criticisms
The planned tax implementation has sparked political debate in parliament. Kim Sang-hoon of the opposition People’s Power Party warned that the failure to grant loss transfer rights could drive domestic investors to foreign exchanges or decentralized platforms. Kim also argued that “taxation should be postponed until the OECD’s Cross-Border Crypto Asset Reporting Framework is fully operational.” A bill introduced in March, which aimed to exempt crypto income from taxation, was referred to a subcommittee in the relevant committee on July 29. Currently, unless the law is repealed or postponed again, the tax implementation will begin on January 1, 2027.
