South Korea is considering imposing a new education tax on cryptocurrency exchanges. If these exchanges are reclassified as financial services under the proposed Digital Assets Basic Act, major operators such as Upbit and Bithumb could be required to pay billions of Korean won in taxes each year.

• South Korea is considering imposing an education tax on cryptocurrency exchanges if they are classified as financial services under the Digital Assets Basic Act.
• Government officials have recently discussed this proposal with executives of domestic cryptocurrency exchanges, but no final decision has yet been made regarding the new tax obligations.
• Currently, financial institutions are required to pay an education tax of 0.5% on taxable income. For amounts exceeding 1 trillion Korean won, the tax rate is 1%, and this tax must be paid even if there is a loss.
• Based on the operating revenue for 2025, Dunamu's operations of Upbit are expected to face an education tax of approximately 10.2 billion Korean won, while Bithumb will face about 3.2 billion Korean won.

According to a report by the Seoul Economic Daily on October 26, as authorities continue to advance legislation to bring digital asset businesses under a more comprehensive regulatory framework, government officials recently mentioned this possibility in discussions with CEOs of domestic cryptocurrency exchanges in South Korea.

The government is currently considering whether, if crypto exchanges are officially recognized as financial businesses, they should pay an education tax in the same way that banks, insurance companies, and securities firms do.

A senior government official told industry representatives that if crypto exchanges are classified as financial businesses, the government would need to consider whether they should pay education taxes.

The official explained that when South Korea first established its cryptocurrency regulatory framework in 2018, exchanges were not classified as part of the financial industry. As the government prepares to introduce new legislation, authorities now need to discuss whether this classification should be changed.

Cryptocurrency exchanges may be taxed based on their operating income

In South Korea, current cryptocurrency trading and brokerage services are considered information and communication services, therefore exchanges are exempt from the education tax that banks and other financial institutions are required to pay.

However, if the 'Digital Assets Basic Law' classifies crypto exchanges as financial services, and the government updates the existing classification and taxation rules, this situation may change.

Currently, financial institutions in South Korea pay education tax based on their operating income. The tax rate is as follows: for income subject to tax not exceeding 1 trillion Korean won, a tax rate of 0.5% is applied; for the portion exceeding this threshold, a tax rate of 1% is levied.

Unlike corporate income tax, which is calculated based on profits, education tax is calculated based on income. This means that even if financial companies ultimately report losses, they are still required to pay this tax.

If the same rules apply to crypto exchanges, they would be required to pay education tax on their taxable income, regardless of the final profit after deducting operating costs.

According to an analysis by the Seoul Economic Daily of the financial reports of South Korea's five major cryptocurrency exchanges, Upbit operator Dunamu had operating revenue of 1.5212 trillion Korean won in 2025.

Bithumb ranked second with approximately 651.3 billion Korean won, followed by Coinone with 45.4 billion Korean won. Meanwhile, the operating revenues of DigitalX and Gopax were 9.7 billion Korean won and 4.3 billion Korean won respectively.

Based on the current financial institution education tax rates, reports estimate that Dunamu may pay approximately 10.2 billion Korean won per year, while Bithumb may face a tax bill of around 3.2 billion Korean won.

However, these estimates assume that crypto exchanges will be required to pay an education tax, and that their transaction fees will be exempt from value-added tax. The final amount may vary depending on which types of income are subject to taxation and what exemptions the new rules allow for.

The "Digital Assets Basic Law" is still under discussion.

Meanwhile, as South Korean regulatory authorities advance the country's second phase of cryptocurrency legislation, proposals for an education tax have also come to the fore.

According to previous reports by crypto.news, Lee Eun-yuan ( Lee Eog - weon ), the chairman of the Financial Services Commission of South Korea, told lawmakers on October 22 that the government's consultations regarding the "Digital Assets Basic Act" are nearing completion.

However, the authorities have not yet announced the official date for submitting the bill, and several provisions regarding the regulation of cryptocurrency exchanges and the issuance of stablecoins are still under discussion.

Earlier this September, the Financial Services Commission of South Korea set November as the deadline for submitting the matter to a parliamentary subcommittee for review, as part of the country's efforts to advance digital asset regulation in the next phase.

The proposed legislation is expected to be built upon South Korea's existing "Virtual Asset User Protection Act," which has introduced protective measures for crypto investors and set requirements for the operation of exchanges.

Issues that remain to be resolved include: how digital asset service providers should obtain licenses, how exchanges should be regulated, and which institutions are allowed to issue stablecoins denominated in Korean won.

Debate in South Korea over tax on crypto earnings continues

Discussions surrounding the taxation of cryptocurrency exchanges coincide with South Korea's consideration of postponing once again the tax on investment earnings from digital assets, which has been postponed repeatedly.

According to the current arrangements, starting from January 1, 2027, the portion of annual cryptocurrency earnings that exceed 2.5 million Korean won will be subject to a combined tax rate of 22%.

However, the Presidential Palace has already supported a further postponement of the tax collection. Members of the ruling party have proposed to push back the implementation date to 2029, citing insufficient preparatory work and the difficulty in tracking overseas transactions.

The proposed education tax is different from the investment income tax, as the former targets the operating income of cryptocurrency companies, rather than the profits earned by individual investors.

Meanwhile, the National Tax Service of South Korea is still continuing to prepare the existing tax framework for investors, including cryptocurrency trading guidelines that are expected to be released in November.

This guide is expected to clarify the tax treatment for staking rewards, airdrops, hard forks, and decentralized financial activities, which have all required further clarification before the implementation of the plan.