Key Points
- 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 Korean authorities are exploring the implementation of an education tax targeting cryptocurrency trading platforms. This levy would take effect should digital asset exchanges undergo reclassification as financial service providers under the upcoming Digital Asset Basic Act.
Senior government representatives discussed this possibility during a recent conference with executives from leading domestic cryptocurrency exchanges, as reported in an October 26 Seoul Economic Daily article. Authorities have yet to finalize any decisions on the matter.
A high-ranking government source indicated that shifting exchanges into the financial and insurance sector would necessitate addressing the education tax obligation. The source emphasized that the cryptocurrency sector’s original 2018 framework deliberately positioned it outside traditional financial industry classifications.
Understanding the Education Tax Structure
Currently, South Korea categorizes cryptocurrency trading and brokerage services as information and communications enterprises. This classification exempts exchanges from the education tax obligations that apply to traditional financial institutions including banks, insurance providers, and securities companies.
The levy calculation relies on operating revenue rather than net profit. Financial service companies pay 0.5% on taxable revenue reaching 1 trillion won, with amounts exceeding that threshold taxed at 1%. Organizations must remit payment regardless of whether they operate at a loss.
The rate applicable to revenue surpassing 1 trillion won increased this year from 0.5% to its current 1% level. The nation’s five largest banking institutions contributed approximately 260 billion won during the first half of last year, with projections indicating payments around 480 billion won for the corresponding period this year.
Projected Financial Impact on Leading Exchanges
Seoul Economic Daily analyzed 2025 financial reports from the country’s five largest cryptocurrency platforms. Dunamu, the company behind Upbit, recorded operating revenue of 1.5212 trillion won. Bithumb reported approximately 651.3 billion won in operating revenue.
Coinone’s revenue reached 45.4 billion won, while DigitalX recorded 9.7 billion won and Gopax reported 4.3 billion won.
Based on prevailing rates, Dunamu’s annual education tax liability could approach 10.2 billion won. Bithumb might face obligations totaling approximately 3.2 billion won.
These projections operate under the assumption that exchanges will become subject to education tax requirements and that trading fees will receive exemption from value-added tax. The calculations exclude interest income, dividend payments, and other separately taxed revenue streams.
Should trading fees receive VAT exemption, customer expenses could decrease. Alternatively, exchanges might reduce fee discount programs or increase base rates to offset the new tax burden.
Kim Kyung-ho, who leads the digital asset center at Deloitte Anjin, noted that calculations could become complex given the fierce fee competition characterizing the exchange marketplace.
An industry representative questioned the logical connection between cryptocurrency trading activities and educational funding. This official advocated for comprehensive reform of education tax policies across the entire financial services sector.
The Digital Asset Basic Act remains under active deliberation. Financial Services Commission Chairman Lee Eog-weon informed lawmakers on October 22 that governmental discussions on the legislation were approaching conclusion, though no submission timeline has been established.
Unresolved matters include licensing frameworks for exchanges and supervisory protocols. Policymakers continue determining which institutions will receive authorization to issue won-denominated stablecoins.
The education tax proposal operates independently from a planned 22% levy on annual cryptocurrency profits exceeding 2.5 million won. That capital gains tax carries a scheduled implementation date of January 1, 2027, though the presidential administration has supported postponement, and governing-party legislators have proposed deferring it until 2029.
Exchanges simultaneously confront new disclosure requirements. The revised Foreign Exchange Transactions Act becomes effective December 3 and mandates that exchanges report cross-border cryptocurrency transfers.
A Bank of Korea representative stated the institution is coordinating with the Ministry of Finance and Economy to refine the reporting scope. The central bank intends to complete these specifications during November.
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