South Korea will impose a 10-50% gift tax on Crypto Airdrops
The South Korean government will introduce a gift tax on crypto airdrops, with the tax rate ranging from 10 to 50%. Regulators will examine the air droplets on a case-by-case basis.
South Korea’s government has announced that it will begin imposing a git tax on crypto airdrops with the tax rate as high as 50% in some cases. The Ministry of Strategy and Finance said on 22 August that the taxation will be assessed on a case-by-case basis and that it will vary from 10 to 50%.
Transfers of assets via airdrops fall under the Inheritance and Gift Tax Act, and the authorities said that with respect to airdrops, “the gift tax will be imposed on the third party to whom the virtual asset is transferred free of charge,” namely the airdrop recipient. The department said,
“Whether or not a specific virtual asset transaction is subject to gift tax is a question that must be determined in relation to the transaction situation, such as whether it is a consideration or whether actual property and profits are transferred.”
The move marks yet another regulation from South Korea. The country is expected to launch a capital gains tax on the crypto market in 2025, which has been delayed. Officials are also weighing up other aspects of regulation, including regulation of exchanges.
South Korea moves ahead with crypto regulation
The country has taken a number of measures to crack down on illegal activity in the crypto market. Sixteen crypto platforms face suspension during this crackdown, with regulators saying some foreign platforms have not registered domestically. Some of these include KuCoin, Phemex and Bitglobal.
The South Korean police agency is also experimenting with allowing crypto seizures when fines are not paid. It expects to collect 1 billion won in unpaid fines by the end of the year.
The Terra investigation continues
In the meantime, the authorities in the country are still continuing with the investigation of Terra. They have intensified the investigation of the company and crash of LUNA and UST. Other countries have also expressed concern about the project and its crash.
Projects are now much more cautious about their strategies, as regulators crack down on them in the wake of the crash. Regulators are also investigating currency transactions in commercial banks for illegal use of crypto.
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