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South Korea Plans to Tax Crypto Airdrop Recipients: Report
The government said crypto airdrops count as gifts under tax legislation.
Par Camomile Shumba
In South Korea, recipients of crypto airdrops could be slapped with a tax of up to 50%, a government official said, according to Digital Times.
Airdrops, or blockchain based token giveaways, are one of the ways crypto companies market their initiatives.
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South Korea said last year it will start taxing inherited or gifted tokens under local inheritance tax laws. The tax authority interprets this to include crypto airdrops, a Ministry of Economy and Finance official said on Monday, Digital Times reported.
The gift tax could be levied on the person who receives the airdrop, the official said in response to a query on the matter. The recipient will have to file a tax return within three months of the airdrop and tax will be levied at 10%-50%, the report said. The tax will be considered on a case-by-case basis, an official from the tax industry told Digital Times.
South Korea is ramping up efforts to regulate crypto. The country plans to start taxing crypto earnings by 2025, including a 20% tax on annual gains exceeding 2.5 million won ($1,860). It's not alone. The U.K. launched a manual on crypto taxation in 2021; U.S. citizens who've invested in crypto are expected to fill out a tax return and India has also implemented new tax policies.
The Ministry of Economy and Finance did not respond to CoinDesk's request for comment.
Read more: South Korea Postpones 20% Crypto Tax to 2025
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