NFT regulations are the latest example of confusion over crypto assets in the country. Government officials are giving contradictory messages about the anticipated crypto tax rules.
South Korean cryptocurrency enthusiasts are swimming in a sea of confusion regarding the possibility of repealing or amending the anticipated crypto tax rules that come into effect in 2022. The country’s National Assembly has had hot debates throughout 2022 on whether or how to amend the crypto tax. The upcoming law proposes a 20% tax on any income above $1,200 from crypto-based transactions.
Did not classify NFTs as cryptocurrency
A few weeks ago, an official from regulator the Financial Services Commission (FSC) stated authoritatively that non-fungible tokens (NFTs) were not subject to the upcoming crypto-tax law. According to the official, the law based on FATF guidelines did not classify NFTs as cryptocurrency.
However, the FSC Vice Chairman Do Gyu-sang seems to have a completely different point of view. His statement that appears to reverse the earlier position said:
“The Ministry of Strategy and Finance is preparing tax provisions for NFTs in accordance with the Special Reporting Act […] NFT is now under the current Special Act (Act on the Reporting and Use of Specific Financial Transaction Information) in accordance with the regulations of the Financial Services Commission (FSC) can be recruited.”
Confusion among stakeholders in the crypto industry
The South Korean crypto community remains skeptical about their government’s intentions and whether it has their best interest at heart. The frequent lack of clear direction as far as the official policy direction is involved hasn’t improved things. Commenting, Stablenode’s Nam Doo-wan stated on Twitter:
“Korean gov: ‘We might flip our position, but you crypto heads will be slapped till that happens.”
There have been conflicting reports about the content of the upcoming regulation between the opposing parties in parliament. The continuing element of misinformation regarding when the rules take effect has only worsened matters and created confusion among stakeholders in the crypto industry. Jun Hyuk Ahn, communications manager at Vegax Holdings, said:
“With the presidential elections coming up next March, the Democratic Party is trying to win favor with 20-30-year-olds by delaying the tax […] the power rests with the National Assembly to change the law.”
The conflicting statements from FSC may be a clear indicator that the internal conflict about the law persists. Partisan parties are still hampering the ability within the National Assembly.