South Korea Confirms Crypto Tax Launch for January 2027

South Korea has confirmed that it will start taxing virtual asset gains from January 1, 2027. The government had previously delayed the implementation of this measure three times, originally planning to introduce it in 2022.

The tax applies a 20% rate to gains above 2.5 million won, with local taxes potentially increasing the effective rate to 22%. Deputy Prime Minister and Finance Minister Koo Yun-cheol said that officials may revise the system after launch, including rules on carrying forward losses from crypto trades.

Koo also addressed calls to treat virtual asset profits as capital gains, stating that the government cannot make this change by reviewing digital assets alone. The current Income Tax Act places virtual asset profits under other income rather than standard capital gains, with a basic annual deduction of 2.5 million won and a 20% national tax rate.

The government will apply separate taxation instead of combining crypto profits with employment or business income. This structure keeps virtual asset earnings outside a taxpayer's ordinary income calculation.