South Korea's Virtual Asset Tax Regime Postponed to 2027 Amid Regulatory Uncertainties
South Korea's virtual asset tax regime, initially approved in 2020, has been postponed four times and is now scheduled to commence in January 2027, following previous deadlines set for 2022, 2023, and 2025.
CARF reporting obligations are set to begin in 2026 with the first automatic cross-border crypto data exchanges due in 2027. However, key infrastructure and regulatory guidelines remain lacking, and no public-private task force has been formed to address these challenges.
Tax rules and reporting systems remain unclear, with regulators uncertain how to apply taxation on income from airdrops, staking rewards, mining, lending, or hard forks. The overall framework is currently not functioning effectively.
The planned tax rate will be 22% on annual virtual asset gains exceeding 2.5 million won. South Korea aims to implement cross-border data sharing under OECD rules, paralleling Japan's movement toward a roughly 20% tax on similar profits.
Retail participation in cryptocurrencies remains high, with 10.77 million verified users eligible to trade on domestic exchanges during the first half of 2025. Officials caution that launching the tax regime without clear rules could lead to legal disputes.
Enforcement efforts have intensified, with the National Tax Service authorized to seize cold wallets to recover tax debts. Authorities have confiscated over 146 billion won from more than 14,000 delinquent taxpayers. Locally, the city of Cheongju has seized crypto assets from 203 residents since 2021, with similar seizures expanding in other regions.
