Tax Planning
Mastering Crypto Taxation in Korea: What Individual Holders Need to Know
Starting January 1, 2027, capital gains and rental income from cryptocurrency will be taxed separately under Korean law — here’s how calculations work and what rules apply.
By NomadicTax Research Team • 5-8 min read • August 10, 2026
## Overview of the New Crypto Tax Rules
Starting **January 1, 2027**, South Korea will begin **separately taxing gains and rental income** from virtual assets held by residents or domestic entities under the revised Income Tax Act. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) Key points include:
- Crypto gains or income are classified as *other income (기타소득)*, separate from regular wages or business earnings. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai))
- For assets acquired **before** January 1, 2027, the **acquisition cost** used for tax calculation will be the greater of: the original purchase price or the fair market value as of **December 31, 2026**. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai))
- When the actual acquisition cost is not clearly ascertainable, expenses may be **deemed**, up to **50%** of the disposal or rental revenue, but only for the same kind of virtual asset. These deemed expenses do **not include additional transaction costs**. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai))
- Two valuation methods are allowed for virtual assets per wallet or account: **moving average** (for assets tradeable via an officially licensed crypto business) or **first-in, first-out** (FIFO) for other cases. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai))
- Basic deduction: **KRW 2,500,000** annual threshold. Tax rate for this other income classification is **20%**. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai))
## Practical Examples
| Scenario | Before 2027 Acquisition | After 2027 Acquisition |
|---|---|---|
| Alice bought BTC in **2024** at KRW 10 million and sells in 2028 for KRW 30 million. | Her acquisition cost is the **higher** of original cost (10 mil) or fair value on **Dec 31, 2026**. If fair value was KRW 20 million, cost basis = KRW 20 million, gain = KRW 10 million. | She sells crypto acquired after Jan 1, 2027 — cost basis is actual purchase price; gain taxed at 20% on (sale minus cost minus any recognized transaction costs). |
## Actionable Steps for Individual Crypto Holders
- Verify and record current **fair market value** of any cryptocurrencies held as of **December 31, 2026**, especially if acquired previously. This sets your acquisition cost floor.
- Keep detailed records of purchase date, price, fees, wallet/account source, and whether trade was through a licensed business (to decide between moving average vs FIFO).
- Be aware that **other income tax** is separate: you’ll still have to report these gains under *etc. income* and file in the following **May** during comprehensive tax filing season.
- If your total crypto gains are under the basic deduction (≈ KRW 2.5M), your tax liability may be minimal.
- Seek professional support if you used multiple exchanges or overseas platforms to consolidate cost basis intelligently.
## Implications & Takeaways
This regime aims to bring certainty and fairness: setting cost basis rules for old holdings avoids retroactive disadvantages, while taxing gains and rental income separately clarifies tax obligations. For investors who have built sizable crypto portfolios before 2027, documenting as of year-end 2026 is going to matter a lot. For newly acquired assets, keeping good records and choosing a clear valuation method will streamline compliance. Beyond individuals, compliant platforms and crypto service providers will need to support input of this data from users to comply efficiently.