Taxation of Receiving Cash Compensation Instead of VC from VC Business Operators
The News about the massive hack of one of the biggest virtual currency (VC) business operators is still fresh in our mind. The tax treatment of compensation paid to the victims for their losses has also been at issue. The National Tax Agency has announced on April 16, 2018 that it is taxable as “miscellaneous income.”
2. When compensation exceeding VC acquisition cost
When the compensated amount exceeds the VC acquisition cost, the exceeding portion is subject to income tax as miscellaneous income in principle.
3. When compensation is lower than VC acquisition cost
When the compensated amount is lower than the VC acquisition cost, the below portion is treated as losses, which is offset against other miscellaneous income. But it should be noted that the losses derived from miscellaneous income cannot be offset against other kinds of income such as salary income.
In this News, we mentioned “Taxation of Receiving Cash Compensation Instead of VC from VC Business Operators.”
Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
National Tax Agency
Accessed on April 25, 2018