- Free transfer of assets is considered a “gift” under the Inheritance and Gift Tax Act.
- In South Korea, a gift tax must be paid on any asset with a monetary value.
A new gift tax on airdrops for crypto assets is reportedly being considered by the Ministry of Strategy and Finance. The ministry responded to a tax law interpretation earlier today, August 22, regarding freely transferable cryptocurrencies and whether or not the gift tax can be implemented for the same.
Free transfer of assets is considered a “gift” under the Inheritance and Gift Tax Act, according to a Ministry of Finance official. In this situation, the recipient of the gift of the intangible asset will be subject to a gift tax.
10% to 50% of Entire Gift Value
In the cryptocurrency industry, airdrops, when a platform gives out free tokens to its users, are quite common. At the moment of a blockchain hard fork to a new chain or the deposit of virtual assets into a blockchain network, an airdrop occurs. Crypto staking is another sort of cryptocurrency incentive that might be taxable as a gift.
According to the South Korean news outlet, tax officials have confirmed that starting in 2025, capital gains from virtual assets would be subject to taxation. The donation of virtual assets, however, would remain subject to the existing legal framework.
In South Korea, a gift tax must be paid on any asset with a monetary value. Within three months of the recipient’s receipt, the recipient who is responsible for paying the gift tax must submit a gift tax return. This might range from 10% to 50% of the entire gift value.
The Ministry of Strategy and Finance noted:
“Whether a specific virtual asset transaction is subject to gift tax or not is a matter to be determined in consideration of the transaction situation, such as whether it is a consideration or whether actual property and profits are transferred”.
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