The financial authorities have revealed that non-fungible tokens (NFTs) can be partially taxed even with the current legislation, drawing attention to whether they are taxed or not.
According to the Financial Intelligence Unit (FIU) under the Financial Services Commission on the 23rd, FSC Vice Chairman Do Kyu-sang (pictured) answered a question about NFT taxation from lawmakers at the National Assembly Political Affairs Committee Bill Subcommittee on the 17th of this month, saying, “It is possible to tax NFTs even with the current regulations. That’s the government’s position.”
Vice-Chairman Do said, “NFTs can be included in accordance with the current Special Act (Act on the Reporting and Use of Specific Financial Transaction Information),” he said.
According to the Special Act, income from virtual assets is classified as ‘other income’ and taxed.
Regarding this, an FIU official said, “In principle, most NFTs are not virtual assets, but some of them are virtual assets under the current Special Provisions Act. Rather, it is the consistent position of the financial authorities.”
“However, the tax authorities will ultimately decide which NFTs will be taxed,” he added.
Financial authorities believe that among NFTs, those that are issued in large quantities and become a means of investment and payment are included in the virtual assets under the current Special Provisions Act.
Another FSC official said, “NFT taxation is an area that requires more inter-ministerial consultation.
In this regard, an official from the Ministry of Strategy and Finance said, “NFTs can be taxed on virtual assets only when it is revealed which ones are virtual assets and which ones are not.” .
He added, “Currently, it is not subject to tax, but if the FSC (among the NFTs) characterizes such and such as virtual assets, it becomes subject to tax.”
Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki stipulated that NFTs are not “currently virtual assets” during a government audit by the Ministry of Strategy and Finance in October.
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