Your crypto tax is not set by what you paid — how the same ₩60M sale became ₩10.45M or ₩1.65M

You sold crypto at a profit. Is the tax ₩10.45M or ₩1.65M? Same coin, same person, sold on the same day at the same price. The answer is ₩1.65M, and ₩8.8M hung on it. The reason is not when you bought or what you paid. It is what that coin's market price was on December 31, 2026. Your crypto tax is not set by what you paid.

From January 1, 2027, crypto gains become taxable. The law is already enacted; only the effective date remains, and there is no tax yet. For coins held from before 2027, the cost basis is the larger of the December 31, 2026 market price and what you actually paid (Income Tax Act Art. 37(5)). So the rise before the law takes effect is not taxed. Four steps: when you bought, whether you have records, whether you clear ₩2.5M, and where you traded.

The first step is before or after January 1, 2027. For coins held from before that date, the cost basis is the larger of what you actually paid and the December 31, 2026 price. Say you bought ₩10M worth in 2020, the price was ₩50M at the end of 2026, and you sold for ₩60M in 2027. On the ₩10M you paid the gain would be ₩50M, but the law treats ₩50M as your cost. ₩60M − ₩50M = ₩10M of gain, and the ₩40M rise through 2026 is not taxed. The tax is 22% of ₩7.5M (₩10M minus the ₩2.5M deduction): ₩1.65M. On the actual cost it would have been ₩10.45M, an ₩8.8M difference.

That market price is the average of the prices published at midnight at the start of January 1, 2027 by the exchanges designated by the National Tax Service. This is where most people get confused: the Act says the December 31, 2026 price, the Decree says the price at midnight on the first day of 2027. They look like different dates, but midnight is the boundary between the two years, so it is the same moment.

The second step is records. Coins bought from 2027 onward get no special rule; they are computed on what you actually paid. But if the purchase did not go through an exchange and the cost cannot be verified, 50% of the sale price is allowed as cost. Sell for ₩60M and the cost is ₩30M; the gain is ₩30M, ₩27.5M after the ₩2.5M deduction, and the tax is ₩6.05M. In that case fees and other incidental costs cannot be added separately, because the 50% is a lump. So there is one thing to do now: download your exchange's trade history and deposit/withdrawal history. Trading fees and withdrawal fees are costs too. If an exchange closes or changes its service, old records become hard to find, and records cannot be created after the fact.

The third step is ₩2.5M. If your gains for the year are ₩2.5M or less there is no tax. It is not deducted down to zero but expressly not taxed under a separate provision. Gains means the sale price minus cost and expenses, not the sale price. Sell ₩10M worth that you bought for ₩9M and the gain is ₩1M, so no tax; gains of ₩3M are taxed on ₩500,000 after the deduction, ₩110,000. This tax is separate taxation. It is not combined with other income, so the rate is 22% whatever your salary. And 22% applies only to what remains after the ₩2.5M deduction, so the effective rate is always below 22%.

The fourth step is where you traded. Korean virtual-asset service providers report trade records to the National Tax Service (Income Tax Act Art. 164-4). Overseas exchanges do not send data automatically, but the duty to file remains and you must prepare the records yourself. No data reaching the tax office does not mean no tax. It means you have to prove it. The same goes for coins moved to a private wallet. Coin-to-coin swaps are valued at that moment as the base coin's price times the exchange ratio, and if you bought the same coin in several lots, the cost is pooled under the total-average method. You cannot claim to have sold only the lots you bought dear.

On timing: the law takes effect on January 1, 2027, and nothing sold through 2026 is taxed. It was promulgated in 2020 and postponed three times (2022, 2023, 2025) to 2027. Some say it may be pushed back again, but the fixed date is January 1, 2027, and changing it requires amending the law again. The first filing is May 2028, for gains earned during 2027. Although the income is not combined with other income, it is filed during the comprehensive income tax filing period (Income Tax Act Art. 70(2)). What to do today is not file, but record.

Two things to do now: download the purchase records of the coins you hold (trade history and deposit/withdrawal history), and record the market price at the end of this year. If it is higher than what you actually paid, that price becomes your cost basis. This covers only the substance of the provisions; details such as which exchanges the tax office designates for price publication come before the effective date. If a large sum is at stake, have a tax adviser confirm. The ₩8.8M was not decided by clever tax planning, but by knowing which date the law uses as its reference.