Evaluation on taxation of NFTs as crypto assets

Non-fungible tokens (NFTs) are unique digital assets stored on the blockchain network, and this technology enables digital property to have verifiable scarcity and ownership. The use of NFTs has grown by a wide audience, from amateur artists to tech CEOs, with buyers spending more than $13 billion on these assets. However, the true value of NFTs is uncertain, with some reaching sales of over $1 million. This rapid proliferation has led to the emergence of new business models, while the need for regulation and taxation has also emerged. Blockchain technology provides the basic infrastructure for crypto-assets; in this context, NFTs consist of units representing inimitable and unique digital assets on the blockchain. The Turkish Language Association and the Presidential Digital Transformation Office have proposed the term "Qualified Intellectual Property" for "Non-Fungible Token". In 2021, NFTs attracted the attention of tax authorities, but adequate legal regulations regarding their legal status and taxation have yet to be developed. This uncertainty could pave the way for malicious uses. Translated with DeepL.com (free version)The main objective of the study is to develop legal regulation proposals for the taxation of NFT transactions. The study will utilize document analysis and survey methodology, and will focus on the development of NFTs, their technological components and the existing legal framework. In addition, it will be argued that the earnings from NFT sales should be subject to income tax, and that the earnings that will be characterized as commercial earnings should be subject to income tax.