South Korea Says Taxing Overseas Stock-Linked Perpetual Futures Requires Review of Capital Markets Law Classification First

The government said a legal review and consultations among financial authorities are needed before it decides whether to tax perpetual futures linked to overseas stocks.

Herald Business reported on November 4 that the Ministry of Economy and Finance said authorities must first determine whether perpetual futures based on overseas stocks qualify as derivatives under the current Capital Markets Act.

A ministry official said South Korea's Capital Markets Act does not clearly cover perpetual futures. Before any discussion of taxation, authorities must first establish the product's legal status. That would require prior consultations between the Financial Services Commission and the finance ministry.

The ministry also said discussions on taxing overseas stock-linked perpetual futures are separate from the issue of taxing virtual assets. Still, it did not rule out the possibility that perpetual futures based on Bitcoin could later be included in a tax review.

The ministry emphasized that perpetual futures must legally qualify as derivatives before taxes can be imposed on them. It also said the underlying asset must be defined under the Capital Markets Act before authorities can determine whether the product is taxable.

As a result, discussions on taxing overseas perpetual futures are set to take clearer shape after financial authorities complete their legal classification review and relevant ministries hold consultations.