Facing persistent tax revenue shortages, the Korean government is considering new taxation strategies—this time targeting virtual assets and digital platforms. As traditional tax sources such as real estate and financial income shrink, policymakers are exploring ways to tap into the fast-growing digital economy.
The Ministry of Economy and Finance plans to enforce income taxation on virtual assets starting in 2027, following a current delay until 2026. Under the proposed system, gains exceeding KRW 2.5 million per year would be subject to a 22% capital gains tax. Industry analysts estimate that this could generate up to KRW 1 trillion (approx. $730 million) annually in tax revenue.
The tax burden is expected to fall mainly on high-net-worth individuals. Of Korea’s 7.7 million registered crypto accounts, the top 1% reportedly account for over 70% of total transaction volume. This concentrated wealth structure may help the government avoid broader public backlash while still securing meaningful tax returns.
Alongside this, the government is also revisiting the idea of a digital services tax aimed at foreign tech giants such as Google, Facebook, and Apple. These companies, while generating significant revenues in Korea, are often taxed at much lower rates compared to domestic platforms—fueling ongoing concerns about regulatory imbalances.
However, implementing a digital tax is not without complications. The proposal aligns with ongoing OECD and G20 discussions around global taxation reform, specifically Pillar 1 and Pillar 2 frameworks. Korea must also navigate potential trade tensions with the United States, where many of these tech companies are based, as well as avoid scenarios of double taxation.
These policy discussions reflect a broader shift in Korea’s fiscal approach. As conventional tax bases weaken, the digital economy presents both a challenge and an opportunity. Still, the government must balance fiscal urgency with social fairness and political feasibility, especially as any new tax scheme may trigger pushback from both consumers and multinational stakeholders.
