Overview
- The government plans to tax cryptocurrency gains above 2.5 million won with a 20% national rate and a 22% combined rate including local tax, treating transfers and lending income as "other income."
- A bill introduced in March would remove crypto income from the Income Tax Act and that measure was taken up by the finance committee and referred to a subcommittee, so implementation is not guaranteed.
- Opponents say the rules bar loss carryforwards and warn that traders may move activity to overseas centralized exchanges, decentralized exchanges, or peer-to-peer channels to avoid the tax.
- Deputy Prime Minister Koo Yun-cheol told lawmakers the government intends to press ahead with the schedule and said reclassifying crypto as capital gains would require a broad review of South Korea’s capital-market tax regime.
- The levy has been delayed repeatedly—from an original 2022 start to 2025 and then to 2027—and critics want the domestic tax to wait until the OECD’s cross-border Crypto-Asset Reporting Framework is ready to improve enforcement.