South Korea confirms that it will tax cryptocurrency gains from January 1, 2027, ending years of controversy

South Korea's Ministry of Economy and Finance officially confirmed that it will tax proceeds from cryptocurrency transactions starting from January 1, 2027, ending years of political debate and repeated postponements surrounding the digital asset taxation framework. The decision was announced by Moon Kyung-ho, Director of the Income Tax Department, at the Virtual Asset Tax Emergency Forum held at the Parliament Building in Seoul. According to South Korea's Income Tax Law, starting from 2027, profits generated from the transfer or lending of digital assets will be classified as "other income." A comprehensive tax rate of 22%(including 20% national income tax and 2% local income tax) will be applied to annual crypto revenue exceeding 2.5 million won (approximately US$1800). The government estimates that the policy will affect approximately 13.26 million cryptocurrency investors. Although opposition parties and some industry figures have called for the complete abolition or further postponement of the tax, arguing that it is unfair to the stock investment income tax abolished at the end of 2024, the government said it will proceed as planned. South Korea's National Revenue Agency is finalizing operating guidelines and has coordinated technical reporting and compliance systems with the country's five major exchanges. Detailed legislative guidance (including trading platform reporting obligations, investor disclosure and treatment standards for pledge, lending, and airdrop earnings) is expected to be released within 2026. At the same time, South Korea is tightening its comprehensive supervision of the digital asset market and has recently revised the Foreign Exchange Transactions Law to include overseas encrypted transfers and cross-border activities in the scope of expanded supervision. Analysts believe that South Korea's implementation model may become a benchmark for other Asian regulators.