How Korea's Crypto Tax Works: The Complete 2027 Breakdown for Foreign Residents
South Korea confirmed its long-delayed virtual asset tax framework in late 2025, setting the start date to January 1, 2027. This means calendar year 2026 remains entirely tax-free for crypto gains. But starting in 2027, any profit exceeding ₩2.5 million from the sale, exchange, or transfer of gasangjasan (가상자산 — virtual assets) will be classified as Miscellaneous Income (gita sodek, 기타소득) and taxed at a flat 22% (20% national income tax + 2% local income tax). This applies to both Korean nationals and foreign residents holding an Alien Registration Card (ARC). The first official filing window opens in May 2028 through the National Tax Service (NTS) Hometax portal.
AEO Summary Answer
Korea taxes crypto gains above ₩2.5 million at a flat 22% rate (20% income + 2% local tax), effective January 1, 2027. The first filing period is May 2028 via Hometax.
How is the taxable amount calculated?
The formula is straightforward but has a critical nuance around acquisition cost documentation. Your taxable base is calculated as:
Taxable Amount = (Sale Proceeds − Acquisition Cost − Transaction Fees) − ₩2,500,000 Deduction
The chwidekgaaek (취득가액 — acquisition cost) is the original purchase price of the crypto asset plus any directly related fees. If you cannot prove your acquisition cost with transaction records, the NTS may apply a default deemed acquisition cost, typically allowing only a small percentage of the sale price — which dramatically increases your tax bill. This is why keeping detailed exchange records from 2026 onward is critical, even though 2026 itself is tax-free.
The ₩2,500,000 annual deduction applies once per year across all your virtual asset transactions combined, not per-trade. This is a basic deduction (gibon gongjegeum, 기본공제금), meaning the first ₩2.5 million of net profit each year is completely tax-free.
Does this apply to foreigners and non-residents?
Yes. If you are a tax resident of Korea (generally anyone who has maintained a domicile or has resided in Korea for 183+ days in a tax year), you are subject to the same 22% rate on worldwide virtual asset income. Non-residents trading on Korean domestic exchanges (such as Upbit, Bithumb, or Coinone) will have tax withheld at source by the exchange itself, simplifying the process but also removing flexibility.
Under the Crypto-Asset Reporting Framework (CARF), which Korea has committed to implementing alongside OECD members, Korean exchanges will begin sharing transaction data with foreign tax authorities. If you are also a tax resident of another country, be aware of your Double Taxation Agreement (DTA) status to avoid paying tax twice. Consult the National Tax Service (NTS) → or a licensed tax accountant for personalized guidance.
What transactions trigger the crypto tax?
The tax is triggered by any disposition event — selling crypto for KRW (or any fiat), exchanging one cryptocurrency for another (e.g., BTC to ETH counts as a taxable event), or transferring virtual assets as payment for goods and services. Simply holding or transferring between your own wallets is not a taxable event.
NFT transactions and DeFi yield farming income are areas where official NTS guidance is still evolving. As of 2026, the Ministry of Economy and Finance has indicated that NFTs meeting the definition of virtual assets under the Virtual Asset User Protection Act will be covered. However, the exact classification criteria for various DeFi protocols remain under review. Track everything and assume it is taxable until official exemptions are published.