South Korean tribunal rules crypto for project work is taxable income

South Korea's Tax Tribunal has ruled that virtual assets received for participating in a blockchain project constitute earned income and are subject to taxation, Digital Asset exclusively reported. The decision stems from a 2021 case where the National Tax Service (NTS) imposed earned income tax on a corporation that had paid its executives with a self-developed virtual asset. The NTS argued the company failed to withhold taxes or submit payment details, calculating the tax based on the asset's market value at the time of distribution. The corporation contended that the assets were not earned income, claiming they were distributed autonomously to participants according to the project's white paper and were not company-owned property. However, the NTS countered that the virtual asset was developed with corporate funds, managed as a company asset with its costs recorded as expenses, and given to executives as compensation for their services. The Tax Tribunal ultimately sided with the NTS, dismissing the corporation's appeal.