South Korea’s Financial Services Commission, or FSC, announced Tuesday that non-fungible tokens, or NFTs, will be taxed from next year. According to The Korea Herald, this tax change will tax 20% on income from virtual assets over 2.5 million won ($2,102) effective January 1, 2022.
FSC Deputy Doh Kyu-san clarified that only some NFTs will be classified as virtual assets and will therefore be subject to “other income taxes,” that is, those used for large-scale investments or payments. The tax authorities are responsible for determining the total taxable NFT.
However, this announcement differs from the situation last month, when the Financial Services Commission (FSC) issued a public statement confirming that NFTs are not virtual assets and will not be regulated. It appears that Korean lawmakers are now looking at NFT in light of taxes like cryptocurrencies. The planned tax on cryptocurrency profits was supposed to go into effect on January 1, 2022, but it can now be postponed due to political resistance.
South Korea has recently taken several measures to regulate the cryptocurrency market to combat money laundering. According to The Korea Herald, all 25 exchanges surveyed for the August regulations were found to have “inadequate” levels of preparedness, and none of them met all of the registration requirements.
On this topic: The regulation of cryptocurrency in South Korea is now extended to foreign companies.
With the NFT market expanding rapidly in South Korea and around the world, the debate over regulation and innovation remains contentious.