South Korea confirms 22% crypto tax from 2027 as trading volumes slump over 50%
1st August 2026 – (Seoul) South Korea has confirmed it will press ahead with a 22% tax on cryptocurrency investment gains from 2027, despite a sharp contraction in market activity. Deputy Prime Minister and. . .
1st August 2026 – (Seoul) South Korea has confirmed it will press ahead with a 22% tax on cryptocurrency investment gains from 2027, despite a sharp contraction in market activity. Deputy Prime Minister and Finance Minister Koo Yun-cheol told a National Assembly committee on 29 July that the government would implement the long-delayed regime as planned, placing profits from the transfer or lending of virtual assets in the “other income” category under the Income Tax Act. The rules will tax annual gains above 2. 5 million won—about US$1,740—at 20% nationally, with local charges lifting the total burden to 22%. Investors below the threshold will not owe tax. Returns covering income earned in 2027 are due in May 2028. Lawmakers first approved the measure in 2020 for a January 2022 start before twice postponing it, initially to 2025 and then to 2027. The policy faces ongoing resistance. Critics, including People Power Party MP Kim Sang-hoon, argue that prohibiting loss carryforwards penalises long-term investors and could drive trading to overseas or decentralised platforms, eroding domestic volumes and tax visibility. Koo acknowledged the concerns but said shifting crypto into a capital gains framework would require a broader review of financial market taxation. A separate opposition bill filed in March seeks to remove crypto income from the tax code entirely and remains in committee, leaving room for potential changes or further delay. Market conditions underscore the debate. Combined trading across Upbit, Bithumb, Coinone, Korbit and Gopax totalled roughly US$366. 6 billion in the first half of the year, down 54. 6% from the same period in 2025. The slide extended into July, when cumulative turnover fell a further 16. 9% from June. Liquidity has become more concentrated: Upbit processed about 11. 69 trillion won in July and, despite a 10% monthly decline in volume, increased its market share from 62. 3% to 67. 4%. Bithumb’s share slipped from 30. 7% to 27. 1%, widening the gap between the two leaders to 40. 3 percentage points.