National Tax Service Reveals Taxation Possibility for Virtual Asset Hard Forks and Airdrops

The National Tax Service (NTS) has stated that virtual asset hard forks and airdrops could be subject to taxation if they have economic substance equivalent to transfer or lending. NTS Commissioner Lim Kwang-hyun said on the 13th during a National Assembly Finance and Economy Committee meeting that if these activities have the nature of transfer or lending, they should be considered taxable. He emphasized that the taxation criteria for digital asset transactions should be based on economic substance rather than transaction names. He also acknowledged that the taxation criteria for certain transactions, such as staking, are unclear and that discussions with the Ministry of Economy and Finance are necessary regarding these issues. The NTS announced that it is preparing a system to cross-check data submitted by exchanges with taxpayers' home tax reports and correct any errors. However, it explained that there are limitations in obtaining transaction information from overseas exchanges. Lawmaker Lim pointed out that if overseas perpetual futures are excluded from taxation, it could lead to equity issues for domestic exchange users and advocated for a tax deferral. Commissioner Lim stated that he would do his best to enforce the law once it is established by the National Assembly.

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