Seoul Says 22% Crypto Tax Sticks in 2027, While Local Trading Volume Already Took a 55% Dive 📉

South Korea's Deputy Prime Minister and Finance Minister Koo Yun-cheol confirmed on July 29 that the country's 22% cryptocurrency tax will take effect on January 1, 2027, ending months of speculation over a possible fourth delay. Speaking before the National Assembly's Finance and Economy Planning Committee, Koo said, "We are pushing forward with the plan to tax cryptocurrency starting next year as scheduled."

Under the Income Tax Act framework, annual gains from transferring or lending virtual assets above KRW 2.5 million, roughly $1,740, will be subject to a 20% national tax combined with a local levy for a 22% total rate. Investors below the KRW 2.5 million threshold owe nothing, and first returns are expected in May 2028, covering income earned throughout 2027. The rule includes a no-loss-offset provision barring traders from carrying losses forward to offset future gains.

South Korea first legislated the tax in 2020 with a planned January 2022 start, postponed it to 2025, then pushed it to 2027 through a December 2024 amendment. Opposition lawmakers remain active against the measure. People Power Party lawmaker Kim Sang-hoon criticized the no-loss-offset design, warning it could push activity toward overseas exchanges, decentralized platforms, and peer-to-peer markets, reducing both domestic volume and tax visibility. Koo acknowledged the concern but resisted changes, noting that shifting crypto into a capital-gains framework would require a broader review of financial-market tax treatment. A separate opposition bill filed in March seeks to remove crypto income from the Income Tax Act entirely and has been referred to a subcommittee, keeping repeal or another delay legally possible.

The tax arrives as South Korea's exchanges are already contracting sharply. Upbit, Bithumb, Coinone, Korbit, and Gopax generated roughly $366.58 billion in combined trading volume during the first six months of the year, a 54.6% drop from the same period in 2025. The contraction continued through July, with cumulative volume falling 16.9% from June. Market concentration intensified in parallel: Upbit processed about 11.69 trillion won in July, and although its volume fell 10%, its market share climbed from 62.3% to 67.4%, while Bithumb's share slipped from 30.7% to 27.1%, widening the gap between the two largest venues to 40.3 percentage points.