South Korea Reaffirms 22% Crypto Tax for 2027

South Korea's Ministry of Economy and Finance has reaffirmed plans to impose a 22 percent tax on virtual asset gains starting January 1, 2027, despite criticism from industry participants and academics over its fairness compared to stock investment taxation. The announcement came during a policy forum on May 7 in Seoul, where officials outlined preparations amid calls for further delays.

Under the policy, rooted in a 2020 amendment to the Income Tax Act, annual profits exceeding 2.5 million won from cryptocurrency transactions, lending, staking, airdrops, and similar activities will face a combined 20 percent national income tax and 2 percent local income tax. Officials emphasized that the legislation stands independently of the recent abolition of the financial investment income tax on most stock gains for retail investors.

Moon Kyungho, head of the ministry's Income Tax Division, defended the timeline at the forum, stating that "income should be taxed where it is generated" and rejecting arguments for postponement. He noted that virtual assets qualify as miscellaneous income under international financial reporting standards, which classify them as intangible assets, providing...