South Korean financial authority decides DTV is taxable
South Korea’s Financial Services Commission, or FSC, announcement Tuesday that non-fungible tokens, or NFTs, will be taxed from next year. According to The Korea Herald, this amendment to the tax law would impose a 20% tax on income from virtual assets over 2.5 million won ($ 2,102) as of January 1, 2022.
FSC Vice President Doh Kyu-sang clarified that only certain NFTs would be classified as virtual assets and therefore subject to “other income taxes”, referring to those used for large-scale investment or payment. . The tax administration is responsible for defining the entire scope of taxable NFTs.
This announcement, however, differs from the position last month when the FSC issued a public statement reaffirming that NFTs are not virtual assets and would not be regulated. Korean lawmakers now appear to view NFTs from the same tax perspective as cryptocurrencies. A planned tax on cryptocurrency gains was supposed to go into effect on January 1, 2022, but could now be delayed due to a political setback.
South Korea recently taken numerous measures to regulate the crypto market, in a targeted effort against money laundering. According to The Korea Herald, all 25 exchanges reviewed under the August guidelines were found to have “inadequate levels of preparation,” with none of them meeting all of the requirements for registration.
Related: South Korea’s Crypto Regulations Now Extend to Foreign Firms
As the NFT market grows rapidly in South Korea and around the world, the debate between regulation and innovation remains controversial.