South Korea’s five largest crypto exchanges — Upbit, Bithumb, Coinone, Korbit, and Gopax — are already working with the National Tax Service to build reporting systems ahead of a major policy shift set for January 2027.
The coordination signals that the government is serious this time, after years of delays and political fights over whether to tax digital assets at all.
Government Draws A Hard LineThe Ministry of Economy and Finance confirmed the policy will go ahead as planned, rejecting calls to push the deadline back again or scrap the tax entirely.
He also defended the 20% rate, arguing it is, in some ways, more favorable to taxpayers than comprehensive taxation would be.
Profits from both transferring and lending virtual assets fall under the new rules, classified as “other income” under the updated Income Tax Act. The crypto tax will remain separate from financial investment income taxes.
Tracking Transactions Across BordersOne of the bigger concerns surrounding the policy involves trades made outside the country — on overseas exchanges, decentralized platforms, and peer-to-peer networks, where transaction data is harder to collect.
The government also pushed back on claims of double taxation. Authorities explained that capital gains taxes on crypto profits and VAT charged on exchange service fees cover different things, so the two charges should not be treated as overlapping.
New Income Types Still Need RulesNot everything is settled. The government said it will release separate tax standards for staking rewards, airdrops, and lending income — newer forms of crypto earnings that don’t fit neatly into existing categories. Those guidelines have not yet been published.
Compliance rules and detailed reporting systems are still being developed by the National Tax Service and the five major exchanges ahead of the rollout.
South Korea ranks among the most active retail crypto markets in the world, and the January 2027 deadline now appears firm.
Featured image from WorldStrides Australia, chart from TradingView
