South Korea Prepares to Tax Crypto Profits with 22% Rate

South Korea is set to become one of the first countries to introduce a comprehensive tax on cryptocurrency profits. As part of its efforts to regulate the industry, the government has confirmed that it will implement a 22% tax on crypto profits above $1,800 starting January 2027.

The policy affects around 13.26 million investors in the country, who are required to report their transactions and comply with new rules. The tax applies to both transferring and lending virtual assets, which will be classified as 'other income' under the updated Income Tax Act.

Despite concerns about double taxation, officials have clarified that capital gains taxes on crypto profits and VAT charged on exchange service fees cover different things. The government has also pushed back on claims of a lack of clarity around the policy, stating that it will release separate tax standards for staking rewards, airdrops, and lending income in due course.