Under the current framework, crypto gains above 2.5 million Korean won, roughly $1,665, would be taxed at a combined rate of 22%.
Crypto News
South Korea's main opposition party introduced a bill Thursday to permanently eliminate a planned tax on cryptocurrency gains scheduled to take effect on Jan. 1, 2027. The People Power Party, known as the PPP, filed the legislation to amend the country's Income Tax Act and remove all provisions related to digital asset income.
Under the current framework, crypto gains above 2.5 million Korean won, roughly $1,665, would be taxed at a combined rate of 22%. That figure consists of a 20% national income tax and a 2% local tax. Implementation has been pushed back three separate times since the tax was first proposed in 2022, each time following resistance from investors and the broader industry.
The PPP built its argument for abolition around three distinct issues. The first is tax fairness. Most retail stock investors in South Korea do not pay income tax on trading gains unless they hold shares at a level that classifies them as major shareholders. Crypto investors would face a blanket tax with no equivalent threshold protection. The PPP argued that applying different rules to similar investment activity is inequitable.
The second argument concerns double taxation. South Korean law treats crypto assets as goods subject to value-added tax. The PPP contends that layering an income tax on top of VAT would result in two rounds of taxation on the same asset class.
The third issue is enforcement. The party said authorities would face difficulty calculating acquisition costs for non-resident foreign investors who trade through overseas platforms, creating gaps in the tax system before it even goes into operation. The bill also referenced recent U.S. SEC guidance classifying most cryptocurrencies as commodities, arguing this designation further separates crypto from securities under the law.
The ruling Democratic Party has not signaled strong opposition but has not endorsed the bill either. Kim Han-gyu, the party's senior deputy floor leader for policy, said the party will review the proposal, according to local outlet Electronic Times. He added that abolishing the tax had not been a subject of serious internal discussion up to this point.
Tax authorities are pressing ahead regardless of the legislative debate. On March 12, South Korea's National Tax Service opened a procurement bid for an AI-powered platform to analyze crypto trading data and identify potential tax evasion ahead of the 2027 rollout.
South Korea's cryptocurrency market is substantial in scale. According to the Financial Services Commission, total market capitalization stood at approximately 95.1 trillion won, around $63.4 billion, as of June 2025. Nearly one in five South Koreans participates in crypto trading or holds digital assets.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
