South Korea is looking to tax non-fungible tokens (NFTs) amid controversy surrounding cryptocurrency regulations in the country. NFTs are virtual collections linked to real life objects such as games, artwork, and music among others whose ownership is locked and transferred on the blockchain. The country aims to use one of its existing laws to tax income earned from the purchase or sale of these virtual assets. The law under consideration to tax NFTs in South Korea is the Designated Financial Transaction Information Act. It defines cryptocurrencies as “virtual assets” and focuses on a reporting system for crypto exchanges.
Doh Kyu-sang, Vice Chairman of the Financial Services Commission of Korea (FSC) revealed the information to the media this week, The Korea Herald report.
It’s been a while since the regulation NFT space is still beset by controversy in Korea.
Last month, Finance Minister Hong Nam-ki said during a parliamentary audit that NFTs should not be classified as virtual assets, which is contrary to what the FSC is currently saying about the NFT space.
In fact, earlier this month, the FSC itself said that NFTs are not virtual assets and would not be subject to regulation.
At that time, the decision was based on a review by the Financial Action Task Force (FATF). The update follows 2019 guidelines for a risk-based approach to virtual assets and virtual asset service providers (VASPs).
“NFTs, or crypto collectibles, depending on their characteristics are not generally considered (Virtual Assets),” The report speak.
According to Korean law, virtual property certificate holders need to pay 20% tax on income in excess of $2,102 (about 1.5 lakh) from the sale of property, such as works of art. NFT of a famous artist, The Korea Herald report explains.
NS crypto space is being closely monitored in Korea.
In September of this year, a new rule came into being in the country requiring cryptocurrency exchanges to register with the Financial Intelligence Unit and work with banks to ensure accounts named real.
More than 60 crypto exchanges in South Korea have notified customers of partial or total suspension transaction service.
Meanwhile, regulations decentralized finance space has been keeping governments around the world trying.
NS cryptocurrency market crashed in India following a Congressional agenda listed by the Indian government – seeking to ban all private cryptocurrencies operating in the country.
