South Korea Plans to Tax Crypto Airdrop Recipients: Report

The government said crypto airdrops count as gifts under tax legislation.

AccessTimeIconAug 22, 2022 at 11:56 a.m. UTC
Updated May 11, 2023 at 6:17 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

In South Korea, recipients of crypto airdrops could be slapped with a tax of up to 50%, a government official said, according to Digital Times.

Airdrops, or blockchain based token giveaways, are one of the ways crypto companies market their initiatives.

South Korea said last year it will start taxing inherited or gifted tokens under local inheritance tax laws. The tax authority interprets this to include crypto airdrops, a Ministry of Economy and Finance official said on Monday, Digital Times reported.

The gift tax could be levied on the person who receives the airdrop, the official said in response to a query on the matter. The recipient will have to file a tax return within three months of the airdrop and tax will be levied at 10%-50%, the report said. The tax will be considered on a case-by-case basis, an official from the tax industry told Digital Times.

South Korea is ramping up efforts to regulate crypto. The country plans to start taxing crypto earnings by 2025, including a 20% tax on annual gains exceeding 2.5 million won ($1,860). It's not alone. The U.K. launched a manual on crypto taxation in 2021; U.S. citizens who've invested in crypto are expected to fill out a tax return and India has also implemented new tax policies.

The Ministry of Economy and Finance did not respond to CoinDesk's request for comment.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.