The South Korean government continues to impose various crypto-related regulations.
The South Korean Ministry of Strategy and Finance, the country’s financial policies watchdog, has announced its plans to impose hefty gift taxes on crypto airdrops.
According to the report shared by a local news portal, the Ministry has decided to impose taxes for crypto airdrops, hard forked tokens, and staking rewards. The taxes can range from 10 to 50% depending on each case.
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The decision to roll out these taxes comes after regulators identified that crypto airdrops, which are transferred to users' accounts for free, fall under the Inheritance and Gift Tax Act. According to this act, the receiver must fill out the tax return form within three months after receiving the gift.
The Ministry notes that the gift taxes will be “levied on the third party to whom the virtual asset is transferred free of charge”. According to the report, the Ministry of Strategies and Finance highlighted that every case will be analyzed individually. The financial watchdog said:
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.
This announcement comes only a month after the South Korean government informed the public that 20% crypto gains taxation is postponed to 2025. Despite this postponement, the authorities decided to launch the gift taxation immediately.
South Korean authorities are actively taking a stand to control the crypto market in its country. On August 18th, The Korea Financial Intelligence Unit (KoFIU) blocked 16 unregistered crypto exchanges, including KuCoin, Phemex, and others. Moreover, the South Korean police are seizing crypto assets in offenders' digital wallets if they have failed to pay hefty traffic fines.