South Korea Requires Comprehensive Income Tax Declaration for Virtual Asset Compensation from Foreign Companies.
According to a report from Mars Finance, the National Tax Service (NTS) of South Korea has officially clarified that South Korean residents who receive virtual assets from foreign companies as labor compensation must declare comprehensive income tax in accordance with legal regulations.
In the response document issued in March this year, the NTS emphasized that if residents do not withhold taxes at the source through tax cooperation methods and receive virtual assets from foreign companies under an employment incentive contract, they must still fulfill the obligation of comprehensive income tax declaration. This applies even when the compensation is not paid in cash but in the form of digital assets.
A specific case mentioned in the report involves Company B, headquartered in Singapore, planning to issue virtual assets to employees of its subsidiary Company C in South Korea. The employee signed an employment incentive contract with Company B in Singapore, performing work related to blockchain and virtual asset exchanges under the parent company's direction, and receiving rewards in virtual assets instead of cash.
With this move, South Korea continues to tighten tax regulations for the digital asset sector, while affirming that all forms of virtual asset income - including those from abroad - fall within the scope of the national tax system.
