South Korea to Start Taxing Crypto Gains Above 2.5M Won in 2027

South Korea plans to levy a combined tax of up to 22% on annual cryptocurrency gains exceeding 2.5 million won ($1,740), with the regime scheduled to begin on Jan. 1, 2027. The measure was initially set to take effect in January 2022, then postponed to 2025. A December 2024 amendment pushed the start date back another two years to 2027, and the government now says it intends to keep that timetable. "We are pushing forward with the plan to tax [cryptocurrency] starting next year as scheduled," Deputy Prime Minister Koo Yuncheol told lawmakers on July 29 at a meeting of the National Assembly's Finance and Economy Planning Committee. Under the current framework, income from transferring or lending crypto would be classified and taxed separately as "other income." Investors would receive an annual deduction of 2.5 million won, while gains above that threshold would face a 20% national tax, or 22% including local income tax, according to Korea's National Tax Service. Kim Sanghoon of the main opposition People Power Party criticized the lack of loss carryforwards and warned the tax could drive activity to overseas centralized exchanges, decentralized platforms, and peer-to-peer markets. He also argued the government should wait until the OECD's cross-border Crypto-Asset Reporting Framework is fully operational. The rollout is not assured. A bill introduced in March would abolish the tax by removing crypto income from the Income Tax Act. The Committee took up the proposal on July 29 and referred it to a subcommittee. Unless lawmakers repeal or further delay the provisions, the tax will take effect on Jan. 1, 2027. Koo said any such change would require a broader, more systematic review of South Korea's capital-market tax regime, including whether crypto profits should be treated as capital gains.