South Korea will levy taxes on NFT

Non-fungible tokens (NFT) are recognized as virtual assets in South Korea. The state’s Financial Services Commission (FSC) said it would have to pay tax on income from them.

Taxes with NFT by law

Speaking at the National Assembly of the Republic of Korea, FSC Deputy Chairman Doh Kyu San noted that this type of token should be taxed under the already developed legislation for virtual assets. Its rules come into force on January 1, 2022, providing for a 20% contribution from cryptocurrency income over $ 2,100 (2.5 million Korean won).

According to San, officials from the Ministry of Economy and Finance are currently working on taxation for the NFT. Not all tokens will be eligible for it. The FSC decided that they would have to pay tax on income from non-fungible virtual assets only when buying and selling tokens from large collections, if they will be used for investment or payments. A complete list of taxable NFTs will be provided at a later date.

As the editorial staff of Crypto.ru previously wrote, for the first time they started talking about the need to levy taxes on crypto income in South Korea in January 2021. Throughout the year, fierce debates were going on in the country, because the new bill had many opponents. Many politicians and even the candidate for the presidency of South Korea, Lee Jae Myung, spoke out against the introduction of taxes from January 1, 2022.

According to experts, the adopted law is discriminatory. It introduces taxes on cryptocurrencies a year earlier than on income from stocks. In addition, the minimum threshold at which payments begin also varies. For digital assets, this is the equivalent of $ 2,100 in local currency, for shares – $ 42,400.

However, Finance Minister Hong Nam Ki supported the original plan. He was convinced of the need to enter the bill into legal force from January 1, 2022. Initially, he did not classify NFT as a virtual asset, however, he proposed to consider this issue in detail and subsequently supported the FSC decision.

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