South Korea Pushes Forward With Crypto Tax Plan Targeting Gains Above $1,740

South Korea is preparing to introduce a cryptocurrency tax on January 1, 2027, indicating that the government does not plan to delay the policy for a fourth time.

The proposed rules would apply a combined tax rate of up to 22% on annual crypto profits exceeding 2.5 million won (around $1,740).

The tax was initially scheduled to begin in January 2022 but was postponed until 2025. A further amendment passed in December 2024 pushed the launch date back another two years, moving implementation to early 2027.

“We are moving ahead with the cryptocurrency tax plan starting next year as scheduled,” Deputy Prime Minister Koo Yun-cheol told lawmakers during a July 29 session of the National Assembly’s Finance and Economy Planning Committee.

Under the current framework, profits from transferring or lending digital assets would be classified separately as “other income.” Crypto investors would receive an annual exemption of 2.5 million won, while gains above that amount would face a 20% national tax rate, rising to 22% when local income tax is included, according to South Korea’s National Tax Service.

Kim Sang-hoon of the opposition People Power Party criticized the proposal, arguing that the lack of provisions allowing investors to carry forward losses could push traders toward foreign centralized exchanges, decentralized platforms, and peer-to-peer markets.

He also suggested delaying implementation until the OECD’s international Crypto-Asset Reporting Framework is fully established to ensure more effective cross-border oversight.

However, the tax plan is not yet guaranteed to take effect. A bill introduced in March seeks to eliminate the levy by removing cryptocurrency income from the country’s Income Tax Act.

The proposal was reviewed by the relevant committee on July 29 and sent to a subcommittee for further discussion. Unless lawmakers repeal or postpone the rules again, the tax will come into force on January 1, 2027.

Koo said eliminating the tax would require a wider review of South Korea’s capital gains tax structure and a decision on whether crypto profits should ultimately be classified as capital gains.