Virtual asset airdrops could be subject to gift taxes in South Korea, local publication Yonhap News Agency reported on Monday, citing tax authorities.

See related article: S. Korea’s 20% crypto tax delayed by two more years

Fast facts

  • In response to a tax law interpretation inquiry, a government official said recipients of free virtual asset transfers can be subject to gift taxes.
  • The recipient would need to file a tax return within three months upon receiving the airdrop, and the tax rate would be levied at 10% to 50%, according to the report.
  • The Korean authorities initially planned to impose a 20% tax on crypto from the start of 2022, which got pushed back to 2025 amid heavy backlash from investors.
  • As part of the nation’s new economic policy roadmap, President Yoon Suk-yeol has said the crypto tax should come after preparing sufficient market infrastructure.
  • The country’s lawmakers are pulling together regulations for trading in digital assets. If all goes to plan, the so-called Digital Asset Basic Act will be in shape by the first half of 2023.

See related article: South Korea’s all-encompassing crypto law is coming — what we know so far