South Korea's Tax Agency to Issue Crypto Tax Guidelines in November Before 22% Levy

November Notice, January Tax

South Korea's National Tax Service plans to publish detailed cryptocurrency taxation standards around November, commissioner Lim Gwang-hyeon told the National Assembly's Finance, Economy and Planning Committee at an audit on Tuesday, October 13. The forthcoming notification defines how each category of digital asset transaction is taxed, and its timing carries weight because the country's cryptocurrency income tax is set to take effect on January 1, 2027. Lim said preparations are underway so the notice can go out “around November,” while stopping short of naming an exact publication date or confirming that every open question will be settled in the first release.

The questions that drew out the timeline came from People Power Party lawmaker Lim I-ja, who argued that taxation standards for specific transaction types remain unsettled and that even exchange-side data collection is incomplete. She listed staking, airdrops, hard forks and decentralized finance activity as categories still lacking clear rules. The commissioner answered that the economic substance of a transaction matters more than its type or name, framing the core question as whether an activity amounts to a transfer or a lending arrangement. Staking, he added, requires further consultation with the Ministry of Finance and Economy before its treatment can be finalized.

Enforcement begins later than the law itself. Lim said that once the statute takes effect, the agency will start verifying gains from transactions during 2027 with the returns filed in May 2028. Committee chairman Cho Seung-rae instructed the government to prepare on the assumption that the levy proceeds unless the National Assembly legislates another postponement, and asked the tax agency to report its notification plan at the comprehensive audit on October 22. Working-level discussions on building the tax reporting systems are already underway with five domestic exchanges, including Upbit.

How the 22% Levy Works

Under the framework, qualifying cryptocurrency income is treated as separately taxed other income under the Income Tax Act, carrying a national rate of 20% plus 2% in local income tax, for a combined 22%. The National Tax Service's published guidance sets an annual basic deduction of 2.5 million won, and taxable income is calculated after qualifying acquisition costs and transaction expenses, with annual gains and losses netted before the deduction applies. Digital assets acquired before the rules begin receive favorable treatment: their acquisition value is generally the higher of the original cost or the market value immediately before implementation, shielding long-term holders from an abrupt taxable step-up.

The schedule has slipped before. Lawmakers first approved the framework in 2020, and the start date moved from 2022 to 2023, then to 2025, before the National Assembly approved a further two-year delay in December 2024. The government retained the January 2027 date in its 2026 tax reform plans despite renewed objections. Opposition pressure persists: a petition seeking a two-year delay gathered the 50,000 signatures required to trigger parliamentary consideration in September, the People Power Party floated an August proposal to push implementation to January 2030, and a separate measure would scrap the cryptocurrency income tax provisions entirely. At an October 6 hearing, Finance Minister Lee Hyoung-il said the ministry would weigh concerns from lawmakers and industry, while acknowledging that revenue from the system is hard to estimate.

Readiness dominated the remaining exchanges of the hearing. Lawmakers questioned whether Upbit, Bithumb, Coinone, DigitalX and Gopax can produce consistent transaction records before the January deadline, and pressed on activity outside regulated domestic platforms, including overseas exchanges and privately controlled wallets. Lim said the OECD's Crypto-Asset Reporting Framework will improve information sharing between tax authorities, but conceded it will not capture every transaction. He offered no reliable estimate of how many investors would become taxpayers or how much revenue the state expects to collect.

The November notification is administrative groundwork rather than a policy shift. The legal timetable still runs unless parliament acts, and the commissioner prepared his testimony on exactly that basis, which is why the October 22 comprehensive audit matters as the next checkpoint. The substance-over-form position implies staking rewards and similar distributions will likely fall inside the tax net on first assessment, though holders cannot compute liability with confidence until the notice is published. Investors who acquired coins before implementation are the clearest near-term beneficiaries of the valuation rule, since pre-2027 holdings default to the higher of cost or market value. Watch the notification plan report and whether delay legislation regains traction before the January 1, 2027 date.