South Korea Financial Regulator May Impose Tax On NFTs |


Amid the ongoing controversy surrounding virtual asset taxation in the country, South Korea’s Financial Authority recently proclaimed non-fungible tokens (NFT) as taxable. On Tuesday, The Financial Services Commission (FSC) of South Korea, announced that it would start taxing NFTs.

According to The Korea Herald, from January next year, this tax law amendment would impose a 20% tax on income from virtual assets that exceed 2.5 million won ($2,102).

How To Get Free Crypto  
Get 110 USDT Futures Bonus for FREE! 

Proposed Tax On NFTs

Vice-Chairman of the FSC, Doh Kyu-sang, said that NFTs are virtual assets under the current Act on the Specified Financial Transaction Information. And therefore, the government is entitled to collect taxes on them. “Under the law, any income earned from purchasing and selling virtual assets is subject to “other incomes” and subject to taxation.”

Related Reading | Crypto Exchanges Distancing From South Korea Ahead of Stricter Regulations

The FSC’s announcement, however, differs from its earlier statement. A guidance report from the Financial Action Task Force (FATF) stated that “NFT, or crypto-collectibles, depending on their characteristics are generally not considered to be [Virtual Assets].” Based on this guideline, the FSC publicly stated that it would not regulate NFTs.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Finance Minister Hong Nam-ki also said last month that there was still some uncertainty about whether or not NFTs fall under virtual assets. His opinion was, “NFTs do not belong to virtual assets yet.”

Park Sung-Joon, head of Blockchain Research Center at Dongguk University, spoke on the contradiction.
“In the situation where the financial authorities are contradicting each other, it is confusing for market players of virtual assets to know whether they must pay taxes or not,” he said.

Coinbase Banner  

He also compared the proposed tax on NFT to the tax rates of real assets. According to the law, owners of virtual assets must pay a 20% tax on all NFT income above 2.5 million won. In comparison, owners of actual paintings pay a 22% tax on income above 60 million won.
According to Park, if the authorities must impose taxes on NFTs, the rates should be similar to real assets. There is no reason for heavier taxation on NFTs.

Crypto Tax In South Korea

The South Korean NFT tax law follows the same trails as the proposed tax on cryptocurrencies. In 2020, lawmakers came up with controversial taxation on income from investing in cryptocurrencies.

Related Reading | Crypto Cards Arrive In Australia. What Are The Tax Implications?

Similar to the NFT tax law, this law also imposes a 20% levy on cryptocurrency gains above 2.5 million won. The law was to take effect from January 2022. However, lawmakers from The opposition People Power Party are pushing for a one-year extension. They are also advocating for tax rates adjustment in line with the proposed Financial Investment Income Tax regime.

Featured image by Skeli on Unsplash

Go to Source
Author: Tolu Okuwoga

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

FreeBitcoin Banner  

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.