South Korea Readies 2027 Crypto Profits Tax

South Korea's National Tax Service has launched preparations for implementing a long-delayed tax on cryptocurrency profits, set to begin on January 1, 2027, affecting the country's 13.26 million virtual asset investors. The agency confirmed the move on April 29, with the first tax filings due in May 2028 for income earned that year.

Under amendments to the Income Tax Act, profits from transferring or lending virtual assets will be classified as other income, taxed at a combined rate of 22 percent, including 20 percent national tax and 2 percent local tax. The levy applies only to annual gains exceeding 2.5 million won, about 1,870 U.S. dollars, sparing small-scale and casual traders. For instance, an investor realizing 10 million won in profits would owe tax on 7.5 million won, totaling 1.65 million won. Losses cannot be offset against other income or carried forward.

The 2027 start follows repeated postponements from original plans in 2022, driven by concerns over market readiness and regulatory clarity. Park Jeongyeol, head of the NTS Individual Taxation Bureau, said the agency is now developing a digital reporting platform, integrating data from major exchanges like Upbit,...