South Korea Crypto Tax: 20% to 49.5% on Gains and Income in 2027

By January 2027, South Korea will start taxing crypto gains - but not everyone will pay. If you make less than 50 million Korean Won (about $35,900 USD) in a year from selling or trading Bitcoin, Ethereum, or other digital assets, you pay zero in capital gains tax. That’s not a loophole - it’s the law. But if you’re trading more than that, or earning crypto from staking, mining, or DeFi rewards, your tax bill could jump to nearly 50%.

How the Crypto Tax Works in South Korea

Capital gains tax kicks in only when your total crypto profits hit over 50 million KRW in a calendar year. That includes profits from selling crypto for fiat (like won or dollars), trading one crypto for another (like ETH for SOL), or even swapping NFTs for profit. The tax rate is 20%, but add local taxes and it becomes 22%. No holding period discounts. No exemptions for long-term investors. If you sold and made a profit above the threshold, you pay.

But here’s where it gets heavy: if you earn crypto as income - say, from staking Ethereum, mining Bitcoin, getting airdrops, or being paid in crypto for freelance work - that’s treated as "other income." And that’s taxed at your personal income tax rate. That rate? It ranges from 6.6% to 49.5%, depending on your total annual income. So if you’re already making over 100 million KRW a year and then add 10 million KRW in staking rewards, those rewards could be taxed at 45% or higher.

This is why you hear people say crypto taxes in South Korea can hit 45%. It’s not the capital gains rate - it’s the income tax rate on rewards. One person might pay 22% on selling Bitcoin. Another might pay 49.5% on their weekly staking rewards. Same country. Two wildly different outcomes.

Who Pays What? Real Examples

Let’s say you’re a retail investor in Seoul. You bought 1 BTC in 2023 for 25 million KRW. In 2026, you sell it for 60 million KRW. Your profit? 35 million KRW. That’s under the 50 million KRW threshold. You pay nothing. No forms. No filing. Just keep your records.

Now, imagine you’re a DeFi trader in Busan. You trade crypto daily. You made 70 million KRW in trading profits this year. You also earned 15 million KRW in staking rewards from lending stablecoins on a decentralized protocol. Your capital gains? 70 million KRW - taxable. Your staking rewards? Also taxable - as income. So you pay 22% on the 70 million (that’s 15.4 million KRW), and then 45% on the 15 million (that’s 6.75 million KRW). Total tax: over 22 million KRW - nearly 25% of your total crypto income.

And if you’re a foreigner living in South Korea? You’re still taxed. If you sell crypto while resident, you pay the same 22% on gains above 50 million KRW. If you receive crypto payments from a foreign company, the government withholds 11% on the transfer value - or 22% on net gains if you report it as income. No escape.

What’s Not Taxed - And What’s Confusing

Here’s the good news: you don’t pay VAT on crypto purchases. Buying ETH with won? No tax. Transferring crypto between your own wallets? Not a taxable event. Holding crypto? No tax. Even gifting crypto to family isn’t taxed - unless it’s part of a business arrangement.

But the gray areas? They’re thick.

How do you calculate the cost basis for a crypto-to-crypto trade? Say you traded 0.5 BTC for 150 SOL. The IRS uses FIFO (first in, first out). South Korea doesn’t specify. Most tax professionals assume FIFO, but the National Tax Service hasn’t confirmed. If you bought BTC in 2021 at 10 million KRW and sold it in 2026 for 150 SOL worth 30 million KRW, is your gain 20 million KRW? Or do you need to track the exact SOL price at the time of trade? No clear answer.

DeFi yield farming? Taxed as income. But how do you value daily rewards in KRW? Do you use the price at the moment you claim them? Or the average price over the week? The government hasn’t said. Many users rely on crypto tax software like Koinly or CoinTracker - but even those tools struggle with Korean-specific rules.

And NFTs? If you buy an NFT for 5 million KRW and sell it for 20 million KRW, that’s a 15 million KRW capital gain. If you’re below the 50 million KRW threshold, you’re fine. But if you’re already at 48 million KRW from other trades? That NFT sale pushes you over. Suddenly, you owe tax - and you didn’t even realize you were close.

Why the Delay to 2027?

The tax was supposed to start in 2022. Then 2025. Then December 2024, after months of political back-and-forth between the ruling and opposition parties, it was pushed to January 2027. Why?

Because the government realized most people weren’t ready. Crypto exchanges in South Korea - like Upbit and Bithumb - had millions of users who didn’t track their transactions. Tax software didn’t support Korean reporting formats. Accountants didn’t know how to handle DeFi income. And the National Tax Service didn’t have the systems to audit crypto wallets.

Industry groups warned: if you force this now, you’ll drive traders offshore. People will use foreign exchanges without KYC. They’ll use privacy coins. They’ll disappear from the tax system entirely. So the government paused it - not to scrap it, but to build better tools.

Now, the National Tax Service is rolling out new guidance. In July 2025, they clarified that crypto received from foreign corporations must be reported as income - closing a loophole where people claimed they didn’t know the source. They’re also working with exchanges to push for automatic transaction reporting. But for now, it’s still on you to track everything.

What You Need to Do Before 2027

If you’re a South Korean resident with crypto, here’s what you should do right now - even if the tax isn’t active yet:

1. Export all transaction histories from every exchange and wallet you’ve used since 2020. That includes Upbit, Binance, Coinbase, MetaMask, Ledger, and any DeFi platforms.
2. Record the KRW value of every crypto you bought, sold, traded, or received at the exact time of the transaction. Use historical price data from CoinGecko or Nomics.
3. Separate your transactions: capital gains (trading/selling) vs. income (staking, airdrops, payments).
4. Use free tools like Koinly or CryptoTaxCalculator to auto-calculate your gains. Then cross-check with your records.
5. Start setting aside money. If you’re likely to exceed 50 million KRW in gains, assume you’ll owe 22%. If you earn crypto as income, assume 30-45%.

Most people think they’ll be fine because they’re "just holding." But if you’ve ever traded, even once, you might be closer to the threshold than you think. One big trade in 2026 could push you over. Don’t wait until December 2026 to start organizing.

How This Compares to the Rest of the World

South Korea’s 20% capital gains rate is actually moderate. The U.S. taxes long-term gains at 0-20%, depending on income. Germany lets you hold crypto for a year tax-free. Japan taxes all crypto gains as income at up to 55%. Portugal doesn’t tax crypto gains at all.

But South Korea’s income tax rate on staking and airdrops? That’s among the highest in the world. Only a few countries - like Belgium or Sweden - tax crypto rewards at similar marginal rates. Most places, like the UK or Canada, treat crypto income as regular income, but they don’t have a 50 million KRW exemption. That makes South Korea unique: high tax on big earners, but a huge buffer for small investors.

That’s why experts call it a "smart compromise." It targets traders and institutions without crushing retail. But the complexity? That’s the cost. You can’t just file a simple form. You need records. You need calculations. You need to understand blockchain.

What Happens If You Don’t Report?

The blockchain doesn’t lie. Every transaction is public. South Korea’s tax agency can trace wallet addresses. They’ve already partnered with blockchain analytics firms like Chainalysis. In 2025, they audited over 1,200 crypto users. 87% of them had unreported gains. Fines? Up to 40% of the unpaid tax. Criminal charges? Possible for large-scale evasion.

And with the OECD’s new Crypto-Asset Reporting Framework (CARF) coming into force in 2027, South Korea will start sharing crypto data with 100+ other countries. If you hid crypto income from the U.S. or Australia, they’ll find out. No more offshore anonymity.

Don’t think you can wait and hope it goes away. The delay wasn’t a cancellation. It was a reset. And 2027 is coming.