Crypto Tax Can Wait, Free Coins Can't: South Korea Considers "Gift Tax" for Airdrops

South Korea has repeatedly deferred its tax on crypto gains due to a lack of investor protection measures and regulatory guidelines.

South Korea's Ministry of Strategy and Finance authorized on Monday that airdrops of virtual assets, staking rewards and hard tokens would be subject to gift tax under the inheritance and gift tax despite deferring tax on crypto gains to 2025.< /p>

Cryptocurrencies are officially designated as virtual assets under South Korean law.

In response to a tax law investigation regarding airdrop transfers of virtual assets by crypto exchanges, the South Korean tax authority said that any free transfer of virtual assets by crypto exchanges in the form airdrops, staking rewards and hard tokens would attract gift tax.

The gift tax will be "levied from the third party to whom the virtual asset is transferred free of charge", reported a local news publication.

The tax authority has authorized that although tax on virtual asset gains will now be applicable from 2025, free transfers of virtual assets will still incur a tax of 10-50% under the inheritance and gift tax law. Said tax obliges the recipient of the free "gift" to file a declaration of donation within three months of receipt.

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