Bitcoin Taxation Set to Take Effect in January 2027…First Tax Filing Due in May 2028

Bitcoin taxation will begin with transfers and lending transactions occurring on or after 2027-01-01. A tax rate of 22%, including local income tax, will apply to an individual's annual net profits from virtual assets after deducting KRW 2,500,000.

Profits from personal virtual asset trading earned during 2026 are not subject to this tax system.

Here is how the tax is calculated.

If annual net profit is KRW 10,000,000,

(KRW 10,000,000－KRW 2,500,000) × 22%

= KRW 1,650,000

※ This calculation was prepared by the author. The actual amount may vary depending on transaction fees and other deductible expenses.

Taxation applies not to simply holding virtual assets, but to transactions in which profits are realized, including the following:

✓ Selling Bitcoin for Korean won

✓ Exchanging Bitcoin for another cryptocurrency

✓ Lending virtual assets and receiving compensation

For Bitcoin held before 2027, the acquisition cost is determined using the higher of the actual acquisition cost and the market value on 2026-12-31. This means that price appreciation before the tax takes effect is not automatically subject to taxation.

The first tax filing and payment period for transactions conducted in 2027 is May 2028.

Key Points to Save Now

① Keep records of purchases and sales from each cryptocurrency exchange.

② Save records of deposits, withdrawals, and cryptocurrency-to-cryptocurrency exchanges.

③ Check records of transaction fees.

④ Record the amount of cryptocurrency held on 2026-12-31.

⑤ Review the Income Tax Act and guidance from the National Tax Service again at year-end.

Transferring cryptocurrency to family members without compensation may raise gift tax issues rather than capital gains tax issues. Income from airdrops, mining, and staking may also be treated differently depending on how it is generated, so the relevant detailed guidance should be checked.

If you hold cryptocurrency, save this article so you can refer to it later. Please also share it with anyone who uses multiple cryptocurrency exchanges.

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※ This article is provided for informational purposes to help readers understand market developments and does not constitute an investment recommendation for any particular security or asset. You are responsible for your own final decisions and investment outcomes.