Court Upholds Tax on Crypto Received in Company Exit Settlement
The Seoul Administrative Court ruled that cryptocurrency received as part of a settlement for a resignation is taxable as honorarium.Summary
In a 2024 decision, the Seoul Administrative Court rejected a challenge by five former employees of blockchain platform developer Company B, who had received cryptocurrency as part of a settlement following a resignation recommended by the company. The employees, who had previously filed a lawsuit against the tax offices to cancel a rejection of their comprehensive income‑tax correction request, argued that the crypto was a tax‑exempt settlement payment linked to unfair labor practices. The court held that the cryptocurrency constituted an honorarium, classified as other income under the former Income Tax Act, because it was paid in exchange for the early conclusion of legal disputes and the maintenance of confidentiality. Accordingly, the tax office’s assessment was upheld and the employees were required to pay the tax on the crypto.
(Source：서울경제)