South Korea Crypto Tax Guide

Virtual Asset Gains Tax — 20% (2026 Status)

• Background: The Korean government first introduced the Virtual Asset Gains Tax (가상자산 과세) as part of the 2020 Tax Reform, originally scheduled for 1 January 2022. The implementation has been delayed multiple times: first to 2023, then to 2025, and then to 2027. As of 2026, the tax is NOT yet in effect, with the current effective date set for 1 January 2027.
• Proposed rate — 20%: When the tax takes effect, the virtual asset gains will be taxed at 20% (plus 2% local income tax — total 22%). The gains will be taxed as "other income" (기타소득) rather than the capital gains, meaning no capital gains tax exemption applies.
• Annual threshold — KRW 2,500,000: The tax will apply only to the annual gains exceeding KRW 2,500,000. The gains below this threshold will not be taxed. The losses may NOT be carried forward.
• Scope: The tax covers the gains from the disposal of the virtual assets (the cryptocurrencies, the NFTs, and the other digital assets). The mining income and the staking rewards are also treated as the other income.
• Cost basis: The cost basis is calculated using the average cost method (평균법) — the total acquisition cost divided by the total quantity held.

For example: if the Virtual Asset Gains Tax takes effect in 2027, an investor who realises KRW 10,000,000 in crypto gains in a year will pay 22% tax on KRW 7,500,000 (KRW 10,000,000 - KRW 2,500,000 threshold) = KRW 1,650,000 in tax.

Current Tax Treatment (2026 — Before the Crypto Tax)

• No special crypto tax — yet: As of 2026, the virtual asset gains are NOT subject to any specific tax regime. The gains from the crypto trading are effectively tax-free for the retail investors, because Korea does NOT have a general capital gains tax for the individuals and the crypto gains do not fall under any other income category.
• Corporate crypto gains: The corporations and the businesses that deal in the virtual assets are subject to the corporate tax on the crypto gains at the standard corporate tax rates (9% to 24%). The crypto gains are treated as the ordinary business income for the corporate taxpayers.
• Airdrops and hard forks: The National Tax Service (NTS) has issued guidance that the airdrops and the hard fork tokens are taxable as "other income" (기타소득) at the time of receipt, at the standard 20% withholding rate (plus 2% local income tax). However, the enforcement is limited and the reporting is voluntary.
• Gift and inheritance of crypto: The virtual assets are treated as the property for the inheritance tax and the gift tax purposes. The valuation is based on the market value at the date of the inheritance or the gift. The rates are 10% to 50%.

For example: a corporate crypto trader with KRW 200,000,000 in crypto gains in 2026 pays corporate tax at the applicable rate (KRW 20,000,000 at 9% + KRW 180,000,000 at 19% = approximately KRW 36,000,000).

Reporting Requirements

• Exchange reporting to the NTS: Since 2022, the licensed crypto exchanges (the ones registered with the FIU) are required to report the transaction data of their users to the National Tax Service (NTS). The exchanges report: the user identification information, the account balances, and the transaction history.
• Self-reporting (2027 onward): When the Virtual Asset Gains Tax takes effect, the individual investors will be required to file an annual tax return for the crypto gains as "other income" (기타소득) — included in the global income tax return (종합소득세 신고) by the end of May of the following year.
• Foreign account reporting: If the total balance of the foreign financial accounts (including the foreign crypto exchange accounts) exceeds KRW 500,000,000 at any time during the year, the individual must file a foreign financial account report (해외금융계좌 신고) by 30 June of the following year.

For example: a Korean resident with KRW 600,000,000 in a Binance account must report the account to the NTS by 30 June via the foreign financial account reporting system. The penalty for non-compliance is up to 20% of the unreported balance.

Licensed Exchanges — FIU Registration

• FIU licensing: The crypto exchanges operating in Korea must register with the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC) pursuant to the Act on Reporting and Using Specified Financial Transaction Information (특정금융거래정보의보고및이용에관한법률).
• Requirements: The FIU-registered exchanges must: obtain the ISMS (Information Security Management System) certification; implement the real-name account system (실명계좌) with a Korean bank; conduct the customer due diligence (CDD) and the AML/KYC checks; and report the suspicious transactions.
• Major licensed exchanges: The four major FIU-registered exchanges in Korea as of 2026 are: Upbit (더블유디), Bithumb (빗썸), Coinone (코인원), and Korbit (코빗). These exchanges have the real-name account partnerships with the Korean banks (K Bank, NH Bank, KakaoBank, and KB Kookmin Bank respectively).
• Unregistered exchanges: The unregistered (foreign) exchanges are NOT accessible through the Korean banking system. The Korean investors may still use the foreign exchanges (e.g., Binance, OKX) but face the difficulties with the KRW deposits and the withdrawals. The NTS may still access the data through the international information exchange.

For example: a Korean investor must use the real-name account at a Korean bank to deposit KRW on Upbit. The investor cannot use a Binance account with a KRW deposit, as Binance does not have the FIU registration in Korea.

FAQs

Is crypto trading illegal in South Korea?

No. The crypto trading is legal in South Korea. The government regulates the exchanges under the FIU and the AML framework. The trading is permitted on the FIU-licensed exchanges. The Korean government has banned the ICOs (initial coin offerings) since 2017, but the secondary market trading is fully legal.

Do I need to pay tax on the crypto gains in 2026?

As of 2026, the Virtual Asset Gains Tax has NOT taken effect — the implementation has been delayed to 1 January 2027. The individual crypto investors generally do NOT need to report or pay tax on the crypto trading gains for the 2026 tax year. The corporate investors and the businesses must still pay the corporate tax on the crypto gains.

What happens if I trade on an unregistered foreign exchange?

Trading on the unregistered foreign exchanges is NOT illegal for the Korean individuals, but the deposits and the withdrawals in KRW may be restricted. The foreign exchange accounts must be reported if the total balance exceeds KRW 500,000,000. The NTS may request the transaction data from the foreign exchanges under the international tax information exchange agreements (CRS — Common Reporting Standard).