Tax Planning

Preparing for Korea’s 2027 Crypto Tax Regime: What Every Investor Needs to Know

South Korea will begin taxing gains from cryptocurrency transfers and loans from **January 1, 2027**—here’s how the “gains-only” tax works and what taxpayers should do now.

By NomadicTax Research Team • 5-8 min read • August 14, 2026

## Background South Korea passed an amendment in **December 2024** to the Income Tax Act, establishing that starting **January 1, 2027**, gains arising from the transfer or lending of virtual assets will be taxed as **‘other income,’** separate from regular income stream. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) Prior to that, the measure’s implementation was delayed to allow taxpayers and the tax system time to prepare. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) ## Key Features of the Crypto Tax Regime - **What is taxed**: The income from transfers (e.g. selling or swapping cryptos) or lending virtual assets. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) - **Basis for cost deduction**: - If the acquisition cost is clear: actual cost plus related expenses. - If not: an eligible flat-rate cost allowance up to **50%** of the proceeds. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) - **Cost methods**: - For trades via registered virtual asset service providers: **moving-average method**. - Others (e.g. OTC trades): **first-in-first-out (FIFO)**. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) - **Special rule for assets held before enactment**: For virtual assets held before Jan 1, 2027, the deemed acquisition cost (if actual cost is unknown) is the greater of the market price as of **December 31, 2026** or the actual acquisition cost. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) - **Rates and thresholds**: - Taxed as *separated miscellaneous income* at **20%** rate. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) - Basic exemption: KRW 2.5 million per taxpayer annually. ([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) ## Practical Planning Steps 1. **Document all transactions now**: Keep wallet records, transaction history, receipts—these will matter for cost basis. 2. **Identify service provider type**: Whether you use a registered exchange (moving-average) or not (FIFO) will affect your tax impact. 3. **Evaluate whether to recognize unrealized gains now**: If you hold assets pre-2027, assessing their fair market value as of end-2026 helps if exact acquisition cost is unclear. 4. **Plan trades or lending wisely**: Holding assets across the cut-off date may change your deductions; lending or leasing cryptos platforms need scrutiny. 5. **Estimate your tax and project liquidity**: With a 20% tax on net gains and documentation requirements, ensure you can pay any liabilities—especially since tax returns are due in the following year. ## Case Example Mr. Kim bought 10 ETH on **June 1, 2025** for KRW 6 million. He also has bonus ETH from an airdrop, acquisition cost unknown. On **March 15, 2027**, he sells 5 ETH for KRW 8 million. - For the 5 ETH from his purchase: cost basis via moving-average method = about KRW 3M, gain ~ KRW 5M taxed 20%. - For the airdropped ETH: since acquisition cost is “unknown,” the deemed cost = **market price as of December 31, 2026** if greater than any actual cost, else actual cost—but then expenses capped. ## Actionable Advice - Consult with a tax advisor to set record systems. - Use tools or wallets that export cost basis and transaction ledger in detail. - If you expect large crypto gains, consider spreading transactions to avoid pushing into higher effective tax liabilities (due to loss deductions, if any). - Check any double taxation treaties if you hold or transact via overseas service providers. **Bottom line**: From **Jan 1, 2027**, profits from crypto transfers and lending will be taxed at 20% after your cost basis (actual or deemed) and eligible expenses. Good documentation today can save surprises later. Knowledge + records = smoother compliance.