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    South Korea to Levy Tax on Crypto Airdrops up to 50%

    According to local media, South Korean officials disclosed that the current law could impose a “gift tax” on crypto airdrops.

    Officials at the Ministry of Strategy and Finance said:

    “In this case, a gift tax will be levied on the third party to whom the virtual asset is transferred free of charge.”

    Crypto airdrops can be taxed up to 50%

    According to the new economic roadmap by crypto-friendly South Korean President Yoon Suk-yeol, the government will not levy a tax on capital gains from digital assets until 2025. The President said this is necessary to prepare for “sufficient market infrastructure.”

    However, according to tax authorities, the gift tax is “comprehensively levied on all objects of economic value” with a tax rate as high as 50%.

    “A person obligated to pay gift tax must file a gift tax return within 3 months from the end of the month in which the gift date belongs, and the tax is levied at a rate of 10-50%.“

    The Ministry of Strategy and Finance has not made any official announcement. Other government officials said gift tax determination should be done case-by-case. To some extent, the Ministry partially agrees that the classification of airdrops to gift tax will be determined “in consideration of the transaction situation.”

    There are many different views of government agencies on the matter, that emphasize the lack of a clear cryptocurrency framework, making it more complicated to add tax laws.

    What is crypto airdrop? 

    Crypto airdrop is a marketing strategy adopted by crypto startups to promote the project and their new token. It involves distributing their native cryptocurrency to current or potential users for free. Sometimes, users have to complete simple promotional activities before they can claim, such as following the project’s social media account and sharing their posts.

    There are different types of airdrops, and each crypto project has its own requirements. But most airdrops share the same goal: to increase awareness and overall interest in the project. Some are done directly into users’ wallets, while others require a manual claim.

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