South Korea

In South Korea, cryptocurrencies are legally classified as "virtual assets" under the Digital Asset Basic Act (DABA), enacted in 2024. This establishes a regulated environment, with the Financial Services Commission (FSC) overseeing anti-money laundering and securities aspects. Crypto service providers follow specific guidelines, and corporate crypto holdings have been permitted since January 2026. The National Tax Service (NTS) is the primary governmental body responsible for administering crypto taxation in South Korea, operating within the framework of laws like the Digital Asset Basic Act. Currently, individual investors in South Korea face no direct income tax or capital gains tax on their cryptocurrency activities, with no distinction for holding periods. However, a 10% Value Added Tax (VAT) is applied, as cryptocurrencies are classified as taxable goods. For corporations, standard progressive corporate tax rates of 10-25% apply. Significant changes are planned from January 1, 2027. Under these planned reforms, a 22% tax (20% national plus 2% local) will be levied on capital gains from crypto exceeding an annual exemption of KRW 2.5 million. Both converting crypto to fiat and swapping one cryptocurrency for another are currently untaxed, but are planned to become taxable events under the 2027 regime. Activities like staking, mining, and Decentralized Finance (DeFi) are currently untaxed. NFTs are classified as virtual assets, and gains from them are also currently untaxed. Under the planned 2027 framework, income from staking and mining will be considered taxable income. Gains from DeFi activities will also become taxable. For NFTs, specific taxation rules are expected by 2026, aligning their treatment with the broader virtual asset classification. The implementation of the planned 22% tax on crypto gains, effective January 1, 2027, has been subject to multiple delays and active political opposition, with some factions pushing to scrap the plan entirely. Concurrently, an AI tracking system for virtual asset transactions is scheduled for a pilot in November 2026, with full implementation planned from 2027 to enhance tax enforcement.