South Korea to tax crypto gains at 22% from Jan. 1, 2027

South Korea’s Finance Ministry confirmed profits from crypto transfers and lending will be treated as “other income” and taxed at 22% beginning Jan. 1, 2027. The levy applies to annual crypto income above 2.5 million won and combines a 20% national income tax with a 2% local tax. Officials estimate about 13.26 million investors will be affected.

The announcement came at an emergency parliamentary forum at the National Assembly Members’ Office Building in Seoul. Moon Kyung-ho, director of the ministry’s income tax division, announced the timetable and said, “We will proceed with virtual asset taxation as scheduled in January next year.” He added the tax framework is based on the current Income Tax Act provisions that assign profits from virtual asset transfers and lending to the other income category from Jan. 1, 2027.

The National Tax Service is finalizing guidance on reporting, valuation and compliance and has held working-level meetings with five major exchanges-Dunamu (Upbit), Bithumb, Coinone, Korbit and Gopax-to prepare a draft notice. The ministry said the notice will be published for legislative review during 2026 and that earlier remarks suggesting an immediate release were premature.

Lawmakers delayed the tax twice after it was first scheduled to take effect in 2025, citing concerns over exchange readiness and the income threshold. Members of the ruling party have recently proposed legislation to remove the tax before its 2027 start date.

Separately, regulators have proposed changes to anti-money laundering rules that would require exchanges to flag overseas-linked transfers of 10 million won or more as suspicious. An industry group representing 27 registered virtual asset service providers warned the requirement could raise reported suspicious transactions from about 63,000 last year to more than 5.4 million. The Financial Services Commission and the Financial Intelligence Unit opened a public comment period on the amendments through May 11, with final rules expected in July.

The Finance Ministry said forthcoming guidance will clarify how investors and exchanges must report crypto income, how assets will be valued for tax purposes and what compliance steps are required. Exchanges and industry groups have requested clearer rules and more time to update systems; government engagement with major exchanges aims to address technical and operational issues before the draft notice goes out for formal review next year.