1. Virtual Asset Taxation in 2026
This guide states that South Korea's taxation of virtual asset income took effect after several postponements. It describes virtual asset income as other income, reported and paid under separate taxation.
📌 Key Points
The guide lists: Taxable income: Income from transferring or lending virtual assets · Tax rate: 22% (20% income tax + 2% local tax) · Basic deduction: KRW 2.5 million per year · Tax period: January 1–December 31 each year · Filing period: May of the following year.
2. Taxable and Nontaxable Items
Taxable ✅
- Gains on sales — Profit from buying a coin and selling it at a higher price.
- Gains on coin-to-coin exchanges — Buying ETH with BTC is also treated as selling BTC.
- Income from lending coins — Income from staking and lending.
- Airdrops — Coins received free of charge are also listed as taxable.
Nontaxable or Deductible ❌
- KRW 2.5 million or less per year — The basic deduction applies, leaving no tax.
- Holding coins — No tax applies when coins are held without being sold.
- KRW deposits and withdrawals — Simply depositing or withdrawing won at an exchange does not incur tax.
3. Calculating Tax
Calculating Acquisition Cost
The guide describes two ways to calculate a coin's acquisition cost (purchase price):
- Moving average method — Update the average purchase price with each purchase (default).
- Specific identification method — Use the actual price at the time of purchase (optional).
4. How and When to File
Filing Period
The guide specifies May 1–May 31 each year for reporting virtual asset income from the previous year (January 1–December 31).
Filing Procedure
- Download annual transaction records from the exchange (Upbit: Investment History → Transaction History).
- Add up annual gains from sales.
- Visit the National Tax Service's Hometax (hometax.go.kr).
- Select Comprehensive Income Tax → Other Income → Enter Virtual Asset Income.
- Pay the tax.
💡 Tip
The guide states that most Korean exchanges, including Upbit and Bithumb, automatically send transaction records to the National Tax Service. Transactions on overseas exchanges must be reported personally.
5. Using Overseas Exchanges
The guide lists additional obligations for users of overseas exchanges such as Binance and Bybit:
- Overseas financial account reporting — File in June if the balance on overseas exchanges exceeds KRW 500 million at a month-end.
- Voluntary reporting — Gains from trading on overseas exchanges must also be reported and taxed in South Korea.
- Penalties for nonreporting — A penalty of up to 40% may apply.
🚨 Caution
The guide warns that concealing the use of overseas exchanges constitutes tax evasion. It says the National Tax Service can obtain overseas transaction records through international cooperation and urges voluntary reporting.
6. Five Tax-Saving Strategies
- Realize no more than KRW 2.5 million — The guide says keeping annual realized gains within KRW 2.5 million results in zero tax.
- Offset losses — Sell profitable and losing coins in the same year to reduce net gains.
- Review at year-end — Review the portfolio in December, sell to realize losses, then repurchase.
- Hold for the long term — The guide describes long-term investing as advantageous because no tax applies without a sale.
- Consult a professional — For large amounts, consult a tax accountant about lawful ways to reduce tax.
7. Frequently Asked Questions
Q. I bought Bitcoin but have not sold it. Do I owe tax?
No, according to this guide. Holding without selling does not incur tax. Tax applies only to “realized gains.”
Q. Does buying coins on Upbit and sending them to Binance trigger tax?
No, according to this guide. Moving (transferring) coins is not taxable. Tax applies only when they are sold.
Q. Are NFTs taxable too?
It depends. The guide says NFTs classified as virtual assets are taxable, while those classified as artworks are subject to separate rules.
Q. Are profits from automated AI trading taxable?
Yes, according to this guide. Whether trading is automated or manual, profits from selling virtual assets are taxable.
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