South Korea Crypto Tax Plan Could Cost Upbit Billions of Won Each Year
by Maisie Morrison · BlockonomiTLDR
Table of Contents
- South Korea is considering an education tax on crypto exchanges if they are reclassified as financial businesses under the Digital Asset Basic Act.
- Upbit operator Dunamu could owe about 10.2 billion won a year, while Bithumb could owe about 3.2 billion won.
- The tax is based on revenue, not profit, at 0.5% up to 1 trillion won and 1% above that.
- No final decision has been made, and the Digital Asset Basic Act still has no submission date.
- A separate 22% tax on crypto gains, set for 2027, may be delayed to 2029.
South Korea is considering a new education tax on cryptocurrency exchanges. The tax would apply if exchanges are reclassified as financial businesses under the proposed Digital Asset Basic Act.
Government officials raised the idea in a recent meeting with chief executives of domestic crypto exchanges, according to an October 26 report by Seoul Economic Daily. No final decision has been made.
A senior government official said that if exchanges move into the financial and insurance category, the education tax issue would need to be addressed. The official noted that when the crypto business was designed in 2018, it was not placed within the financial industry.
How the Education Tax Works
Crypto trading and brokerage in South Korea are currently classified as information and communications businesses. Because of this, exchanges do not pay the education tax that banks, insurers, and securities firms pay.
The tax is based on operating revenue, not profit. Financial firms pay 0.5% on taxable revenue up to 1 trillion won and 1% on amounts above that. A company must pay even if it reports a loss.
The rate on revenue above 1 trillion won doubled this year from 0.5% to 1%. The five largest banks paid about 260 billion won in the first half of last year and are expected to pay around 480 billion won in the first half of this year.
Estimated Costs for Upbit and Bithumb
Seoul Economic Daily reviewed 2025 reports from the country’s five largest exchanges. Dunamu, which operates Upbit, posted 1.5212 trillion won in operating revenue. Bithumb followed with about 651.3 billion won.
Coinone reported 45.4 billion won, DigitalX reported 9.7 billion won, and Gopax reported 4.3 billion won.
Using current rates, Dunamu could pay about 10.2 billion won a year in education tax. Bithumb’s bill could reach about 3.2 billion won.
These estimates assume exchanges become education taxpayers and that trading fees become exempt from value-added tax. Interest, dividends, and other separately taxed revenue were not included.
If trading fees become VAT-exempt, costs for users could fall. Exchanges could also cut fee discounts or raise rates to cover the new tax.
Kim Kyung-ho, head of the digital asset center at Deloitte Anjin, said the math could get complicated because fee competition among exchanges has been intense.
One industry official said there is little connection between crypto trading and education. The official called for an overhaul of the education tax on the whole financial sector.
The Digital Asset Basic Act is still under discussion. Financial Services Commission Chairman Lee Eog-weon told lawmakers on October 22 that government talks on the bill were nearing completion, but no submission date has been set.
Open questions include how exchanges will be licensed and supervised. Officials are also still deciding which institutions can issue won-based stablecoins.
The education tax is separate from a planned 22% tax on annual crypto gains above 2.5 million won. That tax is set to begin on January 1, 2027, but the presidential office has backed a delay, and ruling-party lawmakers have proposed moving it to 2029.
Exchanges also face new reporting rules. The revised Foreign Exchange Transactions Act takes effect on December 3 and requires exchanges to report cross-border crypto transfers.
A Bank of Korea official said the bank is consulting with the Ministry of Finance and Economy on narrowing the reporting scope. The bank plans to finalize the details in November.