South Korea confirms crypto tax for January 2027 as parliament weighs repeal

South Korea's government has reaffirmed plans to begin taxing cryptocurrency gains on January 1, 2027, after postponing the measure three times since its original 2022 implementation date. Deputy Prime Minister Koo Yun-cheol told the National Assembly Finance and Economy Planning Committee on July 29 that the government is "pushing forward with the plan to tax [cryptocurrency] starting next year as scheduled."

The specifics of the tax are now public. Gains exceeding 2.5 million won, roughly $1,740, will be taxable at a combined rate of up to 22 percent, comprising a 20 percent national tax and local income tax. Income from transferring or lending crypto will be taxed separately as "other income," per government statements reported by CoinDesk.

Yet implementation is not assured. A bill introduced in the National Assembly in March would abolish the crypto tax entirely by removing crypto income from the Income Tax Act. On July 29, the same day the government's reaffirmation was made, the Committee took up this measure and referred it to a subcommittee. Unless lawmakers vote to repeal or further delay the provisions, the tax becomes law on January 1, 2027.

Critics have raised two categories of concern. Some lawmakers, including Kim Sang-hoon of the principal opposition People Power Party, argue that taxation should be postponed until the OECD's cross-border Crypto-Asset Reporting Framework is fully operational, ensuring international coordination. Others warn that the rules, which do not permit loss carry-forwards, may harm domestic demand and push investors toward offshore centralized exchanges, decentralized platforms, and peer-to-peer markets, according to reporting by CoinDesk.

South Korea has delayed this tax twice before. The measure was originally due to take effect in January 2022, was postponed to 2025, and was delayed again via a December 2024 amendment to December 2026. The government's latest confirmation, combined with the legislative pendency, leaves the outcome uncertain.

The Bottom Line: Watch the National Assembly subcommittee's action on the repeal bill; if it dies in committee or fails a floor vote, the tax takes effect as scheduled on January 1, 2027. If lawmakers vote to repeal, South Korea's crypto gains will remain untaxed and the government's third sequential delay becomes precedent.