South Korea Sets Sights on Cryptocurrency Gains Tax in 2027

South Korea is set to tax cryptocurrency gains above $1,740 as part of its broader tax regime. The country plans to impose an up to 22% combined tax on annual crypto gains exceeding 2.5 million won ($1,740) from January 1, 2027.

This move comes after several delays, with the original plan being to implement the tax in January 2022. However, it was postponed until 2025 and then again delayed by two years to start of 2027 due to amendments.

Deputy Prime Minister Koo Yun-cheol stated that the government is pushing forward with the plan to tax cryptocurrency as scheduled.

The tax framework will treat income from transferring or lending crypto as 'other income', allowing investors an annual deduction of 2.5 million won. Gains above this threshold will be subject to a 20% national tax rate, or 22% including local income tax, according to the National Tax Service.

However, some lawmakers have expressed concerns that the absence of loss carryforwards could lead investors to shift their activity to overseas exchanges and platforms. Kim Sang-hoon from the People Power Party argued that taxation should wait until the OECD's cross-border Crypto-Asset Reporting Framework is fully operational.