South Korea Implements 22% Crypto Gains Tax for 2027 as Exchange Volume Slumps

South Korea's finance ministry confirmed that a 22% tax on cryptocurrency profits will take effect on 1 January 2027. The levy consists of a 20% national tax plus a 2% local surcharge and applies only to annual gains exceeding 2.5 million won (about US$1,740). Investors with lower profits are exempt, and the first tax filings are scheduled for May 2028 covering the 2027 fiscal year.

The tax treats crypto earnings as "other income" and does not allow losses to be carried forward to offset future gains, a point criticized by opposition lawmaker Kim Sang‑hoon, who warned it could push traders toward overseas exchanges or decentralized platforms. The measure was originally approved in 2020 and has been postponed twice before, now slated for 2027.

During the first half of the year, trading volume on South Korea's five largest crypto exchanges fell roughly 55%, shrinking the market to a fraction of its previous size. Officials acknowledge the volume drop but say the tax is necessary despite concerns that it may further erode domestic trading activity.