South Korea is set to begin taxing virtual-asset income next year, but a key category of trading activity still appears to sit outside the current framework. Profits from crypto futures and options traded on overseas exchanges are not covered by the rules due to take effect, according to reports, leaving a gap as authorities move ahead with broader taxation of digital assets.

From next year, South Korean residents will face a 22% tax, including local income tax, on income earned from transferring or lending virtual assets. The tax is applied after annual gains and losses are offset and a 2.5 million won deduction is taken, and it covers activity on both domestic and foreign exchanges.

What the new tax will cover

The incoming regime applies to gains derived from transferring or lending virtual assets. Under the reported rules, taxpayers will calculate their annual profit by netting gains and losses, then apply a 2.5 million won deduction before the 22% rate is imposed.

The scope is not limited to trading on South Korean platforms. Income tied to virtual-asset transactions on overseas exchanges is also included, as long as it falls within the categories defined by the new tax rules.

Why overseas derivatives remain untaxed

The issue is narrower when it comes to crypto derivatives. Reports say gains from futures and options trading on overseas crypto exchanges are not included either in the rules for income from virtual-asset transfers and lending or in existing tax provisions for derivatives.

As a result, those profits remain outside the current tax net. The reported reason is not a newly announced exemption, but a lack of policy coordination: the Ministry of Economy and Finance and the Financial Services Commission have reportedly not exchanged any official documents on the matter since 2022.

Use of foreign platforms is increasing

The gap matters because South Koreans’ use of overseas crypto exchanges appears to be growing. Data cited in reports show that 2,320 individuals and corporations reported overseas crypto accounts in 2024, with total balances of 11.0763 trillion won.

A year earlier, 1,043 filers reported such accounts, with balances totaling 10.4031 trillion won. Those figures suggest that cross-border crypto activity is already significant, even before the new tax regime begins.

Industry concern over fairness and incentives

The crypto industry has warned that the difference in treatment between spot transactions and overseas derivatives could create a tax fairness problem. If spot gains are taxed while profits from certain offshore futures and options trades are not, taxpayers engaged in similar markets could face very different outcomes.

Industry participants also argue that the mismatch could encourage investors to shift toward higher-risk derivatives trading on overseas venues. That concern remains a warning from the sector rather than a confirmed market outcome, but it highlights the practical consequences of the unresolved policy gap.

What happens next

Based on the reported situation, the confirmed next step is the launch next year of taxation on virtual-asset transfer and lending income under the 22% framework. At the same time, overseas crypto futures and options profits remain outside the current rules unless authorities move to address the issue.

For now, the absence of official document exchanges between the Finance Ministry and the FSC since 2022 indicates that no formal resolution has been reported on the overseas derivatives question.

Source: en.bloomingbit.io