South Korea Tightens Crypto Tax Rules, Lifts Startup Curbs

South Korea’s National Tax Service (NTS) has clarified that residents receiving crypto wages from foreign employers must report these virtual assets in their comprehensive income tax returns under Income Tax Act Articles 127 and 70. This extension of the crypto tax net closes a loophole for remote workers, freelancers, and consultants paid in tokens. Taxpayers must convert income to Korean won at the transaction date, maintain detailed records, and file proactively in the absence of foreign withholding. On the same day, the Ministry of SMEs and Startups proposed amendments to the Enforcement Decree of the Special Act on the Development of Venture Enterprises. The revision would remove “virtual asset-related industries” from restricted sectors, allowing blockchain-based trading and brokerage firms to gain venture company status and access tax breaks, financing support, and public procurement benefits. The move follows stronger legal safeguards under the Virtual Asset User Protection Act and aims to stimulate growth in South Korea’s digital asset sector. Crypto traders should note that the new rules increase compliance costs but also signal government backing for blockchain startups. Overall, these changes could boost transparency and long-term stability in the Korean crypto market.