The South Korean government is advancing plans to impose a 22% tax on income generated from cryptocurrency staking and lending. According to Coinedition.com, the proposed framework applies to income exceeding a basic deduction of ₩2.5 million (approximately $1,800), consisting of a 20% base tax and a 2% local surcharge.
The National Tax Service (NTS) has finalized its research into the technical scope and calculation methods for taxing these digital assets. Under the current proposal, staking rewards and interest earned through lending platforms will be categorized as "rental" or "use" income under the existing Income Tax Act. The research, conducted by the Changwon University Industry-Academic Cooperation Group, suggests using K-IFRS accounting standards to align crypto taxation with traditional financial instruments.
While staking and lending yields will be taxed upon receipt, the outlet reported that gains from airdrops and hard forks will be deferred until the assets are sold. This distinction is part of a broader effort to integrate virtual assets into the national tax code while accounting for the high volatility and complexity of decentralized finance (DeFi).
Legislative review and public pushback
The tax plan faces significant political pressure. A public petition calling for the abolition of the 22% crypto tax surpassed 50,000 signatures within eight days of its launch. Under South Korean parliamentary rules, this threshold mandates that the Finance and Economic Planning Committee review the petition and report its findings to the plenary session within 90 days.
Despite the outcry from retail investors, the Ministry of Economy and Finance remains committed to the current timeline. Moon Kyung-ho, Director of the Income Tax Division at the Ministry, reaffirmed that the new tax regime is scheduled to take effect on January 1, 2027.
South Korea remains one of the world's most active markets for digital assets, particularly among younger retail investors. Previous attempts to implement similar tax frameworks have been delayed multiple times due to concerns over infrastructure readiness and the unique nature of crypto-based income.
