South Korea Confirms 22% Crypto Tax on Private Wallets and Foreign Exchanges

South Korea has officially confirmed that it will tax income earned from cryptocurrency through private wallets and foreign exchanges starting January 1, 2027. According to the Ministry of Economy and Finance and NTS, taxable income generated by individual wallets and foreign exchanges will be considered regardless of where the asset is located or how it's stored.

The proposed system classifies income from digital assets as other income with an annual deduction of 2.5 million won. Any income exceeding this amount will be taxed at a national rate of 20% and up to 22% additional by local income tax.

The government has acknowledged that monitoring self-custodied wallets presents challenges, as individuals can generate multiple addresses without intermediaries. To solve this issue, NTS plans to develop transaction tracking and analysis systems.