South Korean Government: Virtual Asset Income from Personal Wallets and Overseas Exchanges Will Also Be Taxed

TechFlow reports that, according to Digital Asset on August 20, the South Korean government has stated that digital assets held by residents through personal wallets or overseas exchanges will, in principle, be subject to taxation if they generate returns through transfers or lending. The digital asset tax will take effect on January 1, 2027, classified as other income, subject to a 2.5 million KRW deduction and a 20% tax rate, reaching up to 22% including local taxes.

The South Korean National Tax Service noted that while tracking personal wallet transactions presents practical limitations, transaction monitoring and analytical programs will be implemented to prevent tax loopholes; data from overseas exchanges will be gathered through the Foreign Financial Account Reporting System and the Crypto-Asset Reporting Framework (CARF). Regarding digital assets acquired through staking, lending, airdrops, and hard forks, the government continues to research specific taxation criteria.