A 22% tax, postponed three times—and now South Korea’s crypto market may finally have to face it 🦖
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The South Korean government has scheduled a meeting for October 20, bringing together representatives from the country’s five major domestic exchanges and executives from industry associations to discuss an issue that’s been delayed for six years: Will the virtual asset income tax, originally set to take effect in January 2027, be postponed again?
The proposal is clear: income from selling or lending crypto will be taxed at 22%—including income tax and local tax—after deducting a basic tax-free allowance of 2.5 million won. That’s about $1,800. In other words, anyone who earns less than that in their account won’t have to pay tax for now.
The real issue isn’t the tax rate. It’s how the cost basis will be calculated.
The tax was proposed in 2020 and has already been postponed three times. The reasons have been much the same each time: exchanges say their systems aren’t ready, while investors say they have no transaction records for coins they bought over the counter years ago. If the cost basis can’t be established, the worst-case scenario is that it’s treated as zero—turning the 22% tax into a tax on the principal ⚠️
South Korea’s National Tax Service is expected to issue a notice in November. Financial regulators are still working on a government draft of the Digital Asset Basic Act, which is due to be completed and put forward for consultation by the end of this month. The timeline is firm, but the October 20 meeting itself leaves the door open to another delay.
On the same day, on the other side of the world, France’s National Assembly passed an amendment to tax stablecoin exchanges by a vote of 38 to 37. Each time you exchange cryptocurrency for a stablecoin, you’ll be subject to a 31.4% capital gains tax. It takes effect on January 1, 2027. Two countries, one tax rate of 22% and the other 31.4%—and both have set their effective dates for the same year 📉
My take: the tax rate is just the surface. Three things will really determine the market’s response: whether the tax-free allowance is high enough, whether cost-basis rules can be applied retroactively, and whether exchanges will have to withhold taxes on behalf of users. If the first two issues aren’t resolved, no matter how detailed the third rule is, it will only push trading off-exchange.
BTC is currently at $81,707 and ETH at $2,413. Retail investors have always made up a large share of South Korea’s crypto market. If withholding takes effect, exchange trading volumes will be the first to tell the story 📊
Do you think South Korea will really introduce the tax this time, or will it be postponed for a fourth time? Let’s talk in the comments.
Every day, I bring you the latest crypto stories—not just what’s happening, but the logic and opportunities behind the headlines 👀🚀
📣 盘面异动群里喊
The South Korean government has scheduled a meeting for October 20, bringing together representatives from the country’s five major domestic exchanges and executives from industry associations to discuss an issue that’s been delayed for six years: Will the virtual asset income tax, originally set to take effect in January 2027, be postponed again?
The proposal is clear: income from selling or lending crypto will be taxed at 22%—including income tax and local tax—after deducting a basic tax-free allowance of 2.5 million won. That’s about $1,800. In other words, anyone who earns less than that in their account won’t have to pay tax for now.
The real issue isn’t the tax rate. It’s how the cost basis will be calculated.
The tax was proposed in 2020 and has already been postponed three times. The reasons have been much the same each time: exchanges say their systems aren’t ready, while investors say they have no transaction records for coins they bought over the counter years ago. If the cost basis can’t be established, the worst-case scenario is that it’s treated as zero—turning the 22% tax into a tax on the principal ⚠️
South Korea’s National Tax Service is expected to issue a notice in November. Financial regulators are still working on a government draft of the Digital Asset Basic Act, which is due to be completed and put forward for consultation by the end of this month. The timeline is firm, but the October 20 meeting itself leaves the door open to another delay.
On the same day, on the other side of the world, France’s National Assembly passed an amendment to tax stablecoin exchanges by a vote of 38 to 37. Each time you exchange cryptocurrency for a stablecoin, you’ll be subject to a 31.4% capital gains tax. It takes effect on January 1, 2027. Two countries, one tax rate of 22% and the other 31.4%—and both have set their effective dates for the same year 📉
My take: the tax rate is just the surface. Three things will really determine the market’s response: whether the tax-free allowance is high enough, whether cost-basis rules can be applied retroactively, and whether exchanges will have to withhold taxes on behalf of users. If the first two issues aren’t resolved, no matter how detailed the third rule is, it will only push trading off-exchange.
BTC is currently at $81,707 and ETH at $2,413. Retail investors have always made up a large share of South Korea’s crypto market. If withholding takes effect, exchange trading volumes will be the first to tell the story 📊
Do you think South Korea will really introduce the tax this time, or will it be postponed for a fourth time? Let’s talk in the comments.
Every day, I bring you the latest crypto stories—not just what’s happening, but the logic and opportunities behind the headlines 👀🚀