South Korea is forging ahead with preparations to tax cryptocurrency income, even as lawmakers continue to delay discussions on repealing the upcoming regulation. The National Tax Service (NTS) has reportedly expanded its administrative framework and is actively developing tools to monitor digital asset transactions in anticipation of the tax’s implementation, scheduled to begin in January 2027.
Under the current Income Tax Act, gains from the transfer or lending of virtual assets after January 1, 2027, will be taxable. Investors will receive a basic annual deduction, after which profits exceeding 2.5 million won (approximately $1,900) would be taxed at an effective rate of 22%. The proposal as it stands includes a controversial provision that bars loss carryforwards and prevents investors from offsetting losses from crypto against gains in other investment categories.
While a public petition and legislative attempts to scrap or delay the tax have gained traction, deliberations in the National Assembly remain stalled. The NTS’s proactive stance suggests that, barring a last-minute political reversal, the tax is likely to come into force, marking a significant step in the country’s oversight of the growing digital asset market.
