What is Korean Crypto Capital Gains Tax?
South Korea classifies cryptocurrency gains as 'other income' (기타소득) under its income tax framework. When you sell cryptocurrency for more than you paid, the profit is subject to a flat 22% tax rate — comprising 20% national income tax and 2% local income tax. However, a basic deduction of 2,500,000 KRW per year applies, meaning you only pay tax on gains exceeding that threshold. If your total crypto gains for the year are 2.5 million won or less, you owe nothing.
The tax applies to the net gain calculated as the difference between your selling price and your acquisition cost, minus any allowable expenses such as transaction fees. For each transaction, the gain equals (sell price minus buy price) multiplied by the quantity sold, minus deductible expenses. You aggregate all gains and losses from the calendar year, apply the 2.5 million won deduction to the total, and compute the tax on the remainder.
This tax regime has been the subject of significant political debate in South Korea. Originally planned for 2023, it was postponed multiple times due to industry pushback and market conditions. As of the latest amendment (December 2024), the tax is scheduled to take effect on January 1, 2027. Once in effect, taxpayers must self-report their crypto gains during the annual tax filing period (May of the following year). Exchanges operating in Korea are required to report transaction data to the National Tax Service, making compliance increasingly important.