South Korea has officially stated that its crypto tax will include taxable income generated by means of individual wallets and foreign exchanges as of January 1, 2027. According to the Ministry of Economy and Finance and NTS it doesn’t matter where the asset is located or how it is stored. They said it will still be liable for taxes.
Under the proposed system, income from digital assets will be classified as other income with an annual deduction of 2.5 million won. The income exceeding this amount will be taxed at 20% nationally and additionally by local income tax up to 22%.
Self-Custody Cryptocurrency Will Be Taxed
According to NTS, South Korean residents will have to declare their tax obligations related to cryptocurrency transfers and lending. They reported income regardless of whether individuals used self-custody or foreign exchanges. However, they acknowledged that monitoring self-custodied wallets presents challenges because individuals can generate multiple addresses without intermediaries.
In order to solve this problem, NTS will develop transaction tracking and analysis systems. At the same time, the government continues to work on ways to deal with self-custodied cryptocurrencies when investigating crimes. The new approach differs from the rules governing financial account reporting for foreign individuals. In 2024, foreign wallets that did not control people’s assets were exempted from reporting requirements.
Overseas Exchanges Under Increased Reporting Obligations
In terms of foreign exchanges, South Korea intends to employ Offshore Financial Account Disclosure and the OECD’s Crypto-Asset Reporting Framework for tracking the movements of cryptocurrency. South Korea has also imposed regulations for registration of cross-border transfers of cryptocurrencies.
Government figures revealed that there was almost $60 billion worth of cryptocurrency that was transferred from local exchanges during the latter part of 2025. There are still political objections regarding this issue, as the People Power Party is demanding its abolition or that it be delayed further. A related petition has already reached more than 50,000 signatures. Yet still, preparations for 2027 are underway despite the objection.
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