South Korea plans to tax crypto gains over $1,740 as political battle moves to parliament

South Korea plans to impose an up to 22% combined tax on annual crypto gains exceeding 2.5 million won ($1,740).

The country plans on taxing cryptocurrency gains from Jan. 1, 2027, signaling that it does not intend to postpone the measure for a fourth time.

The tax was originally due to take effect in January 2022 and had been postponed until 2025. A December 2024 amendment delayed its introduction by another two years, to the start of 2027.

“We are pushing forward with the plan to tax [cryptocurrency] starting next year as scheduled., Deputy Prime Minister Koo Yun-cheol told lawmakers at a July 29 meeting of the National Assembly’s Finance and Economy Planning Committee.

Under the current framework, income from transferring or lending crypto will be taxed separately as “other income.” Investors will receive an annual deduction of 2.5 million won, with gains above that threshold subject to a 20% national tax rate, or 22% including local income tax, according to Korea’s National Tax Service.

Kim Sang-hoon, of the principal opposition People Power Party, criticized the absence of loss carryforwards and warned that investors could shift activity to overseas centralized exchanges, decentralized platforms and peer-to-peer markets.