Lee Hyung-il Says Crypto Tax to Start in January 2027 as Planned, Burden to Be Minimal

The South Korean government has reaffirmed plans to begin taxing virtual assets, or cryptocurrencies, in January 2027 as scheduled.

According to News1, Lee Hyung-il, deputy prime minister and finance minister, made the remarks at a full meeting of the National Assembly's Planning and Finance Committee on September 28 in response to a question from People Power Party lawmaker Park Soo-young on whether the government would change its virtual-asset tax policy.

"Under the current tax law, taxation is already scheduled to begin next year," Lee said.

Park said net inflows into South Korea's virtual-asset market in January through August fell 56.8% from a year earlier, while net outflows overseas rose 74%. He said funds were leaving the domestic market ahead of the planned tax rollout.

Lee said about 85% of holders own less than 5 million won. Because a basic deduction of 2.5 million won applies to those holding less than that amount, their tax burden would be almost nonexistent or minimal.

He added that about 90% of investors in their 20s and 30s also hold less than 5 million won. While he does not expect the tax burden to be heavy, the government will also look for supplementary measures to secure taxpayer acceptance if issues arise during implementation.

Responding to criticism that detailed taxation standards have not yet been prepared for staking, airdrops and other virtual-asset transaction methods, Lee said the National Tax Service is preparing a public notice in consultation with the ministry and that related standards would be drawn up as soon as possible.

Under the current system, income generated from the transfer or lending of virtual assets is classified as miscellaneous income. A 22% tax rate, including local tax, applies to annual income exceeding the basic deduction of 2.5 million won. The crypto tax was originally set to take effect in 2022, but after several delays it is now scheduled to begin in January 2027.