Korea’s crypto tax starts in January 2027. The date that actually matters is 31 December 2026.
South Korea will tax gains on virtual assets from 1 January 2027, after three postponements. The headline rate is unremarkable by international standards. What is unusual is the transition rule: holdings acquired before the start date get a one-time cost-basis reset pegged to the market value on 31 December 2026. That single day determines the taxable gain on everything held through it.
The headline numbers
| Item | Detail |
|---|---|
| Start date | 1 January 2027 (disposals on or after) |
| Income classification | Other income, taxed separately from other categories |
| Annual deduction | KRW 2,500,000 (roughly US$1,800) |
| Rate | 20% national plus 2% local = 22% effective |
| Filing window | 1–31 May of the following year |
| First filing | May 2028, covering 2027 |
Gains and losses are netted across the calendar year. Losses cannot be carried forward to later years under the current structure — offsetting works only within the same year.
The transition rule, and why it matters
Under Article 37(5) of the Income Tax Act, for assets already held before 1 January 2027 the acquisition cost is the greater of the market value on 31 December 2026 and the actual acquisition cost.
The intent is to avoid taxing appreciation that accrued before the regime existed. The practical effect is a one-time reset that can only help the holder:
- Bought cheaply years ago? The 31 December 2026 value is higher, so that becomes the basis and the earlier gain escapes tax.
- Bought near a peak and still underwater? The actual cost is higher, so that applies instead.
The benefit is not automatic
To claim the 31 December 2026 value as your basis, you have to be able to show what you held and how much on that date. There is no retroactive way to create that record. Exchange statements, wallet balances, and transaction hashes captured at the time are the evidence.
Worked example
Bitcoin bought for KRW 20 million, sold for KRW 30 million, with KRW 100,000 in fees:
| Scenario | Taxable base | Tax at 22% |
|---|---|---|
| Acquisition cost documented | KRW 7,400,000 | ≈ KRW 1,628,000 |
| No documentation, cost treated as zero | KRW 27,400,000 | ≈ KRW 6,028,000 |
A difference of roughly KRW 4.4 million — around US$3,100 — on a single position, decided entirely by recordkeeping.
Which valuation method applies
Article 88(1) of the Enforcement Decree sets the method per wallet address, and it depends on where the trade happened rather than on whether the venue is domestic:
| Where traded | Method |
|---|---|
| Through a registered virtual asset service provider | Moving average |
| Anywhere else, including private wallets | First in, first out |
In a rising market FIFO tends to assign a lower cost basis and therefore a larger taxable gain, because the earliest purchases were usually the cheapest. Mixing registered-venue trades with private wallet activity means keeping both sets of records straight.
How this compares internationally
Korea is not an outlier on rate. Most major markets already tax crypto gains, and several tax them harder.
| Jurisdiction | Treatment |
|---|---|
| South Korea (from 2027) | 22% above a KRW 2.5m annual deduction, separate taxation |
| Japan | Miscellaneous income up to 55%, with a shift to 20% separate taxation underway |
| India | 30% flat, no offsetting of losses |
| United States | Treated as property; short-term up to 37%, long-term capped at 20% plus possible 3.8% surtax |
| Germany | Tax-free after a 12-month holding period |
| France | 31.4% |
What distinguishes Korea is the low deduction threshold and the dated one-time basis reset, not the rate.
Three postponements
The tax has been deferred repeatedly since it was first legislated, most recently by a December 2024 amendment that moved the start from 2025 to 2027. In July 2026 the finance minister told the National Assembly the government would proceed as scheduled and rejected calls for a further delay.
The history is worth noting for anyone modelling the timeline, though the current position is that 2027 stands.
What holders should do before the year ends
- Export full transaction history from every exchange used, including ones no longer active. Retention policies vary and closed venues cannot be queried later.
- Record holdings and market values as of 31 December 2026, per asset.
- Document private wallet activity — date, quantity, price at the time, and transaction hash.
- Check whether overseas exchange balances trigger foreign financial account reporting, which is a separate and already-active obligation.
Note also that swapping one crypto asset for another counts as a disposal. Frequent swapping multiplies the number of events that need to be reconstructed later.
Primary sources
Every figure on this page traces back to one of these. Please verify against the original before publishing.
- National Tax Service — taxation of residents' virtual asset income — Official overview of the regime
- Korea Law Information Center — Income Tax Act Article 37(5) and Enforcement Decree Article 88(1)
- Hometax — Filing procedures and forms
Related pages
Korean-language coverage
Step-by-step Korean guidance on preparing records before the deadline is published in our regulation and policy board. Terminology is explained in the crypto glossary.
This page summarises publicly available Korean regulatory and market information. It is not legal, tax, or investment advice. Rules change and enforcement dates shift; always confirm against the primary sources linked on this page before relying on it. Tax outcomes depend on individual circumstances; consult a qualified Korean tax professional before acting.