South Korea weighs education tax on crypto exchanges

• South Korea is considering an education tax on crypto exchanges if new legislation classifies them as financial businesses.
• Estimates suggest Dunamu could owe 10.2 billion won and Bithumb 3.2 billion won annually.
• The proposal could affect exchange fees as regulators reconsider tax rules and reporting requirements.

South Korea may tax crypto exchanges as financial firms, according to a report by Seoul Economic Daily.

The proposed Digital Asset Basic Act could reclassify exchanges currently treated as information and communications businesses.

Kim Kyung-ho, head of Deloitte Anjin’s digital asset centre, said intense fee competition among crypto exchanges could complicate tax calculations, depending on how much of the VAT exemption benefit exchanges pass on to customers.

Under current rules, financial firms pay education tax at 0.5% on taxable revenue up to 1 trillion won and 1% above that.

Applying those rates to 2025 revenue estimates puts Dunamu’s potential tax at 10.2 billion won and Bithumb’s at 3.2 billion won.

The estimates assume exchanges become liable for the education tax and trading fees qualify for value-added tax exemption.

Exchanges could offset the tax by raising trading fees or reducing customer discounts, while VAT-exempt services could lower fees for users.

The potential tax change depends on whether South Korea reclassifies crypto exchanges as financial businesses under the proposed Digital Asset Basic Act.