South Korea Confirms January 2027 Launch for Long-Delayed Crypto Tax

South Korea has finalized its 2026 tax reform package without delaying the planned 22% crypto tax scheduled to take effect on January 1, 2027. The Ministry of Economy and Finance confirmed that it had completed the proposal, clearing the way for the long-delayed measure to proceed next year if lawmakers approve the package in the National Assembly.

Under the current Income Tax Act, profits from transferring or lending virtual assets will be taxed as other income starting January 1, 2027. Investors will pay a 20% national tax, with an additional 2% local income tax, on annual gains exceeding 2.5 million won ($1,740). The first tax return covering crypto income earned during 2027 will be filed in May 2028.

The government has pointed to the Organisation for Economic Co-operation and Development's (OECD) Crypto-Asset Reporting Framework (CARF), under which South Korea expects to receive overseas virtual asset transaction data from tax authorities in 48 participating jurisdictions, including Japan, Germany, and France. This international reporting system will significantly reduce blind spots involving offshore crypto transactions.

However, the opposition People Power Party continues to oppose the measure and has proposed amendments to remove crypto income from the Income Tax Act altogether. The party's lawmakers argue that taxing retail cryptocurrency investors while most retail stock investment gains remain exempt creates unequal treatment.