Complete Guide to Calculating Crypto Profit and Loss (PnL) and Filing Taxes — Latest 2026

Key Takeaways

• Virtual asset capital gains tax has been in effect since 2025: 20% tax on annual gains exceeding KRW 2.5 million
• PnL = (selling price − purchase price) × quantity − fees
• Loss carryforward deduction: current-year losses can be carried forward for 5 years and deducted from future profits

What Is Crypto PnL (Profit and Loss)?

PnL (Profit and Loss) is the actual profit or loss amount from virtual asset investments. It is divided into two types.

Realized PnL: Profit or loss from transactions that have actually been sold or closed. This is used for tax calculations.

Unrealized PnL: Valuation gains or losses on positions currently held. These are not subject to tax.

Basic PnL Calculation Formula: PnL = (selling price − average purchase price) × quantity − total fees

Example:

• Buy 0.1 BTC of Bitcoin at $50,000 → Cost: $5,000
• Sell 0.1 BTC at $65,000 → Proceeds: $6,500
• Total fees: $15
• PnL = $6,500 − $5,000 − $15 = $1,485 (about KRW 2 million)

If you need to calculate the average unit price across multiple trades, try the Crypto PnL Calculator.

Virtual Asset Taxes — Latest 2026 Tax Rules

Virtual asset capital gains tax has been in effect since January 1, 2025. The key points are as follows.

Taxable assets: Gains from transferring all virtual assets, including Bitcoin, Ethereum, and altcoins (sales, exchanges, transfers)

Tax Rate Structure:

• Basic deduction: KRW 2.5 million per year
• Separate taxation of 20% on amounts exceeding KRW 2.5 million (22% including local income tax)
• Annual profits of KRW 50 million or more: same tax rate applies (different from general financial income)

Calculation Examples: If annual crypto profit is KRW 10 million:

• Basic deduction: KRW 2.5 million
• Taxable amount: KRW 7.5 million
• Tax: KRW 7.5 million × 22% = KRW 1.65 million

If annual crypto profit is KRW 50 million:

• Basic deduction: KRW 2.5 million
• Taxable amount: KRW 47.5 million
• Tax: KRW 47.5 million × 22% = KRW 10.45 million

6 Tax Minimization Strategies

1. Use Loss Offsetting Offset profits with losses from other coins incurred in the same year.

• Coin A profit of KRW 5 million + Coin B loss of KRW 2 million = net profit of KRW 3 million
• Deduct the basic deduction of KRW 2.5 million → taxable amount of KRW 500,000 → tax of KRW 110,000

2. Loss Carryforward Deduction If a loss occurs in the current year, it can be carried forward for 5 years.

• 2025 loss of KRW 5 million → can deduct KRW 5 million from 2026 profits

3. Spread Realized Gains Across Years If you expect a large profit in December, defer part of it to January to split it across tax years.

4. Sell After Gifting (Family Tax Planning) If you gift crypto to a spouse or direct family member, the value at the time of the gift becomes the acquisition cost.

5. Check Overseas Exchange Reporting Obligations If balances on overseas exchanges (Binance, Bybit, etc.) are KRW 500 million or more, you are required to report overseas financial accounts. Failure to report may result in penalties.

6. Long-Term Holding Strategy (However, Crypto Has No Long-Term Holding Deduction) Currently, unlike capital gains tax for major shareholders of stocks, virtual assets do not receive long-term holding tax rate benefits. A 22% rate applies regardless of the holding period.

To manage liquidation risk as well, see the Liquidation Price Calculator.

National Tax Service Virtual Asset Filing Procedure

Filing Period: May 1 to May 31 every year (same as comprehensive income tax filing)

How to File:

1. 1Access National Tax Service Hometax (hometax.go.kr)
2. 2Tax filing → Comprehensive income tax filing → Select separately taxed virtual assets
3. 3Enter transaction history (CSV file upload available)
4. 4Calculate tax amount and pay

Required Documents:

• Transaction history CSV by exchange (annual)
• Proof of acquisition cost (purchase receipts, transaction history)

Transaction History Retention: You are required to retain virtual asset transaction history for at least 5 years.

If you want to calculate the return across your overall portfolio along with crypto profits, use the Capital Gains Tax Calculator.

Expert Key Summary

Virtual asset taxation, which took effect in 2025, can no longer be avoided. You can legally reduce your tax burden by using the annual KRW 2.5 million basic deduction and actively applying loss offsetting and carryforward deductions. Be sure to download exchange CSV files at year-end, and file taxes through Hometax in May yourself or delegate the filing to a tax accountant.

FAQ

Q1. If my crypto profit is KRW 2.5 million or less, do I not have to pay tax? Yes. If your annual net profit (profits − losses − fees) is KRW 2.5 million or less, it is not taxable. However, you still need to file.

Q2. Are crypto transfers between exchanges also taxable? Transfers between exchanges owned by the same person (Upbit → Bithumb) are not taxable. However, transfers to another person may be considered gifts.

Q3. Are staking and interest income also taxed? Staking rewards and interest income may be taxed as other income. Consulting a tax accountant is recommended for accurate classification.

Q4. Do I not need to report taxes for overseas exchanges? No. Profits from overseas exchanges are also subject to domestic tax law. The National Tax Service is entering into information-sharing agreements with exchanges, so failing to report carries the risk of additional tax collection.

Q5. If my crypto losses are large, can they also be deducted from comprehensive income tax? Under current law, virtual asset losses cannot be deducted from gains on stocks or real estate. Profit and loss offsetting applies only within virtual assets.

Q6. How is Bitcoin mining income taxed? Mining income is classified as business income or other income. Since mining costs (electricity, equipment depreciation) can be treated as expenses, registering as a business and filing that way may be advantageous.