Tax on crypto gains — effective 1 January 2027 | 22% after a ₩2.5M deduction
Income tax will apply to virtual asset income. The amendment to the 소득세법 (Income Tax Act) promulgated in 2020 takes effect on 1 January 2027 after three deferrals. Income from disposing of or lending virtual assets becomes other income: ₩2.5M is deducted from the year's income and the rest is taxed separately at 22%. Below ₩2.5M there is no tax.
Conditions used in the video
- Effective date (under current law)
- 2027-01-01
- Promulgated
- 2020-12-29 (법률 제17757호)
- Deferrals
- 3 times (2022 → 2023 → 2025 → 2027)
- Income class
- other income (taxed separately)
- Basic deduction
- ₩2.5M a year
- Rate
- 20% + 2% local income tax
Results
- Tax today (whatever the gain)
- ₩0
- Tax from 2027 (₩10M gain)
- ₩1.65M
- Taxable amount
- ₩7.5M
- Income tax 20%
- ₩1.5M
- Local income tax
- ₩150,000
- On a ₩20M gain
- ₩3.85M
At a glance
Based on the current Income Tax Act. If the National Assembly defers the date again, this changes.
- Today · ₩10M gain₩0
not taxed
- 2027 · ₩10M gain₩1.65M
(₩10M − ₩2.5M) × 22%
- 2027 · ₩20M gain₩3.85M
(₩20M − ₩2.5M) × 22%
Why it works this way
Today there is no income tax on what you make selling coins, however much it is. The taxing provision was already written by the 소득세법 amendment promulgated on 29 December 2020 (법률 제17757호), but the original effective date of 2022 was pushed back three times, to 2023, to 2025 and to 2027. The date written in the current Act is 1 January 2027.
The amendment classified income from disposing of or lending virtual assets as other income.
소득세법 제21조제1항제27호 · 제37조제1항제3호 (Income Tax Act, effective 2027-01-01).
- Todayno income tax on money made selling or lending virtual assets
- From 2027-01-01disposal and lending income = other income
- Income amountsale proceeds − actual acquisition cost − fees and incidental costs
Swapping one coin for another is a disposal too. To subtract the acquisition cost and fees you need the trade records.
The tax deducts ₩2.5M from the year's income and taxes the rest separately at 22%. That is 20% income tax plus local income tax at 10% of the income tax, which is 2 percentage points more, so 22%.
소득세법 제64조의3제2항 · 제84조제3호 · 지방세법 제103조의3.
- ₩10M gain for the yearless the ₩2.5M deduction → ₩7.5M taxable
- Income tax 20%₩1.5M
- Local income tax 10%₩150,000 → ₩1.65M in total
On a ₩20M gain it is 22% of ₩17.5M, or ₩3.85M. The deduction comes off once and the rate above it is the same.
Below ₩2.5M there is no tax. The ₩2.5M is measured on the year's total, not on a single trade. Because it is not added to global income, a large salary or business income does not push the rate up. Equally, a crypto loss cannot be set against your other income.
Set by 소득세법 제37조제5항 and 시행령 제88조제2항.
- Coins held before 2027cost basis = the greater of the 31 Dec 2026 market value and what you paid
- Trade recordsexchange execution and fee records are the evidence for necessary expenses
- NTS datadomestic virtual asset operators file transaction records with the National Tax Service (소득세법 제164조의4)
Trades on overseas exchanges are not reported automatically. You have to evidence the acquisition cost and fees yourself.
This video and page cover a measure that has been promulgated but is not yet in force. Enforcement Decrees and notices may change the details, and the effective date could move.
In short: virtual asset taxation promulgated in 2020 takes effect on 1 January 2027 after three deferrals, and from that day crypto disposal and lending gains above ₩2.5M a year are taxed separately at 22%.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
소득세법 제21조제1항제27호 (other income, virtual asset income)
In force Effective 2027-01-01 (promulgated 2020-12-29, 법률 제17757호, deferred three times by amendments to the 부칙)
Income arising from the transfer or lending of a virtual asset as defined in Article 2(1) of the 「가상자산 이용자 보호 등에 관한 법률」 (virtual asset income) is other income.
What this means
🔴 The day this provision comes into force is 2027-01-01. It covers not only disposal but what you receive from lending (staking, lending and the like), and swapping one coin for another counts as a disposal.
소득세법 제37조제1항제3호 (necessary expenses for other income)
In force Effective 2027-01-01
For virtual asset income, the necessary expenses are the actual acquisition cost of the virtual asset transferred plus the incidental costs of acquiring, transferring or lending it.
What this means
If you cannot evidence the actual acquisition cost, you cannot subtract it. For assets held before the effective date, the deemed cost under 제37조제5항 applies.
소득세법 제64조의3제2항 (determined tax on virtual asset income)
In force Effective 2027-01-01
The determined tax on income under Article 21(1)27 is the virtual asset income amount less ₩2.5M, multiplied by 20/100.
What this means
That one line is the whole calculation. Subtract ₩2.5M once, then 20%. There are no progressive bands.
소득세법 제84조제3호 (minimum taxable threshold for other income)
In force Effective 2027-01-01
Where the virtual asset income for the tax period is ₩2.5M or less, no income tax is charged on that other income.
What this means
Up to ₩2.5M for the year the tax is zero. It is measured on the year's total, not trade by trade.
소득세법 제14조제3항제8호다목 (excluded from the global income tax base)
In force Effective 2027-01-01
Virtual asset income under Article 21(1)27 is not aggregated when computing the global income tax base.
What this means
It is taxed separately. Other income does not push the rate up, and a crypto loss cannot be set against other income either.
소득세법 제37조제5항 (deemed acquisition cost for pre-2027 holdings)
In force Takes effect 2027-01-01 (inserted 2020-12-29, last amended 2024-12-31)
For virtual assets already held before 1 January 2027, the acquisition cost is the greater of the market value as of 31 December 2026 and the actual acquisition cost.
What this means
🔴 Gains built up through the end of 2026 are not taxed. If the end-2026 market value is higher than what you paid, the higher figure is your cost basis.
소득세법 시행령 제88조제2항 (how that market value is measured)
In force Takes effect 2027-01-01 (inserted 2022-03-08, last amended 2025-02-28)
For assets handled by virtual-asset operators designated by the Commissioner of the National Tax Service, the value is the average of the prices each of them posted at 00:00 on 1 January 2027; otherwise it is the price posted by the operator at that same moment.
What this means
The statute says "as of 31 December 2026" but the reading is taken at 00:00 on 1 January 2027, the same instant across midnight, and it is an average across designated operators, not one exchange.
지방세법 제103조의3 (local income tax rates for individuals)
In force In force
Local income tax on separately taxed income applies at a rate equal to 10/100 of the rate under the Income Tax Act.
What this means
10% of 20% is 2 percentage points more, bringing the total to 22%.
Frequently asked
Is the effective date settled?
The date written in the current Income Tax Act is 1 January 2027. When it was promulgated on 29 December 2020 the date was 2022, and it was pushed back three times, to 2023, to 2025 and to 2027. The National Assembly could defer it again, so this is the position under current law rather than a settled date.
What about coins I sell now, before it takes effect?
Today there is no income tax on virtual asset disposal or lending income. Only disposals and lendings from the effective date onward are taxable.
Is the ₩2.5M measured per trade?
No. It is the total virtual asset income for the year. 소득세법 제84조제3호 provides that no tax is charged where the virtual asset income for the tax period is ₩2.5M or less.
How is the acquisition cost set for coins bought before 2027?
소득세법 제37조제5항 settles it. For coins held before 1 January 2027, the acquisition cost is the greater of the market value as of 31 December 2026 and what you actually paid, so gains built up through the end of 2026 are not taxed. Under 시행령 제88조제2항 that market value is the average of the prices posted at 00:00 on 1 January 2027 by the operators the National Tax Service designates.
What if I made a loss?
If your virtual asset income for the year is zero or below, there is no tax. But because it is taxed separately, the loss is not set against salary or business income, and current law has no rule carrying it forward to the next year.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.