South Korea to impose 22% tax on crypto gains above 2.5 million won from January

South Korea will start separately taxing income from the transfer or lending of virtual assets on Jan. 1 next year, with a flat 22% levy on annual gains above 2.5 million won ($1,800). The tax base will be calculated after netting gains and losses within the same year and applying the basic deduction, but the regime offers no lower rate or exemption for long-term holding and does not allow losses to be carried forward into later years. Critics say that structure can leave investors with a heavier effective burden than in markets such as the US, Australia, Germany and Portugal, where long-term holdings or prior-year losses can reduce tax. Unrealized gains generated before the tax takes effect will not be taxed, and authorities plan to use whichever is higher between the market price at the end of this year and the actual acquisition price as the purchase cost. Under the National Tax Service framework, an investor with 10 million won ($7,200) in annual profit would owe 1.65 million won ($1,200) after the deduction. Deputy Prime Minister Koo Yun-cheol, who also serves as finance minister, said the government will first proceed with implementation after the current grace period expires at year-end and consider changes later if needed.