National Tax Service Finalizes 'Coin Taxation Plan' Including Staking and Airdrops... Scheduled for Release as Early as October

The National Tax Service is preparing detailed guidelines for taxing virtual assets, targeting release in the fourth quarter of this year with potential October disclosure. The guidelines aim to gather expert and industry feedback before finalizing, as virtual asset taxation begins in January 2024. Income from trading or lending virtual assets will be classified as miscellaneous income, with a 22% tax rate (20% national income tax plus 2% local tax) applying to amounts exceeding 250 million won annually. The agency has introduced integrated analysis systems and transaction-tracking software to enhance tax enforcement. Ongoing debates include whether staking rewards and airdrops should be taxed, with disputes over timing—whether to tax rewards incrementally or defer until sale. Concerns about offshore tax evasion persist due to limited access to foreign exchange data, prompting calls for the CARF international information-sharing framework. Issues like disallowing loss carryforwards and the 250 million won exemption threshold remain under discussion.