South Korea to impose tax on staking and airdrops

South Korea to impose tax on staking and airdrops

South Korea will be required to pay tax on staking and airdrops

Tokens received by residents of South Korea as a result of hard forks and airdrops, as well as staking rewards, will fall into the calculation of inheritance and gift tax. This was stated by the South Korean Ministry of Strategy and Finance, according to local media.

The tax will be “levied on a third party that transfers a virtual asset for free.” The rate will be 10-50%. The law requires the recipient to file a tax return within three months of the operation.

The agency acknowledged that the transfer of cryptocurrencies should be considered on a case-by-case basis, given the lack of regulatory clarity on the matter.

“Whether a particular transaction with virtual assets is subject to tax, depends on the specific situation. For example, is it a reward or is the actual property and profit transferred,” the officials noted.

The clarification complements the decision taken in July 2022 to postpone the entry into force of the tax on profits from operations with digital assets until January 1, 2025.

Initially, the authorities planned to introduce a 20% tax on the income of bitcoin traders from January 1, 2022 of the year.

Despite the support of the government’s plans by citizens, in September 2021, parliamentarians from the ruling Toburo Democratic Party spoke in favor of a delay for a year.

In October, a similar proposal was made by representatives of the opposition party “Strength of the People”. The parliamentarians explained their position by the unpreparedness of the fiscal infrastructure for the introduction of the tax.

The government fought off attempts by legislators to approve the postponement, but at the end of November, the relevant committee of the National Assembly voted for a bipartisan amendment postponing the introduction of taxation.

Recall that in May 2022, the media reported that the newly elected president of the country, Yoon Sok-yeol, advocated a new delay.

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