Bithumb, a major crypto exchange in South Korea, has taken the country’s tax authority to court over a “groundless” tax imposed on the exchange. Experts explain that currently there are no grounds to tax crypto transactions in South Korea and existing tax laws do not apply to crypto transactions.
Also read: Regulatory Roundup: EU-Wide Crypto Regulations, New Rules in Europe, US, Asia
Bithumb Seeks to Nullify Tax Bill
While South Korea currently has no law to tax crypto profits, the country’s National Tax Service (NTS) has imposed a tax of 80.3 billion won ($69 million) on Bithumb, one of the largest crypto exchanges in the country. Bithumb subsequently filed a complaint with the country’s Tax Tribunal against the NTS alleging that the agency’s tax imposition on it was “groundless,” the Korea Times reported, elaborating:
The firm claims that cryptocurrency is not a legally recognized currency and therefore the authorities lack the grounds to impose a tax of any kind.
The Tax Tribunal has 90 days to determine whether to grant or dismiss Bithumb’s motion which seeks to nullify the 80.3 billion won in withholding tax imposed by the NTS, the news outlet added. “We cannot comment on the ongoing matter. We will await the judgment from the Tax Tribunal,” an NTS official was quoted as saying.
The NTS’ Motive and Method Used
Experts have speculated about why the NTS has slapped Bithumb with a tax bill when the current Korean tax law does not apply to crypto transactions. The Ministry of Economy and Finance, which oversees the country’s economic policy, recently explained that individual investors’ crypto profits are not taxable in South Korea. However, work is underway to amend the tax code to allow
