Bithumb Takes Korea’s Tax Authority To Court Over A ‘Groundless’ Tax Imposed On The Exchange
Bithumb Takes Korea’s Tax Authority To Court Over A ‘Groundless’ Tax Imposed On The Exchange
January 20, 2020
Bithumb Takes Korea’s Tax Authority To Court Over A ‘Groundless’ Tax Imposed On The Exchange
Bithumb Takes Korea’s Tax Authority To Court Over A ‘Groundless’ Tax Imposed On The Exchange
January 20, 2020

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.

It has been reported that 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.

However, 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:

“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.”

It has been analyzed that 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.

ALSO READ :  Huobi Japan Opens Voting Line For Users On Listing 6 New Tokens

Likewise, an NTS official was quoted as saying:

“We cannot comment on the ongoing matter. We will await the judgment from the Tax Tribunal.”

However, 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 the taxation of cryptocurrency.

Choi Hwoa-in, an adviser to the Financial Supervisory Service, explained that with a growing number of traders profiting handsomely from cryptocurrencies over the past few years, the tax authority has viewed this sector as a new source of taxable income.

Likewise, the publication conveyed:

“Choi suspects that the NTS is putting the issue front and center for public discourse in a clever move seeking to establish grounds to impose tax on what essentially remains tax-free gains.”

It has also been analyzed that to tax Bithumb, the NTS has categorized foreign traders’ crypto gains as miscellaneous income. Earnings from real estate or stock trading are categorized as capital gains in South Korea.

ALSO READ :  Giottus Announces Free INR Deposits And Withdrawals With Guarantee Of Withdrawals In 10 Minutes

Further, Choi explained:

“Bitcoin under the current law is not an asset. It is clear and simple. The Ministry of Economy and Finance already made that clear.”

Choi added:

“The NTS pushing ahead with the tax imposition is baseless and groundless, especially since it is still awaiting the ministry’s opinion on the same matter.”

On the other hand, Ahn Chang-nam, a Tax Professor at Kangnam University, believes that it is “realistically difficult” for the government to know about every crypto transaction.

Ahn opined:

“It seems like the NTS took a practical approach in categorizing gains from crypto asset trading as miscellaneous assets.”

Thus, Choi concluded:

“Bithumb filing a suit after paying the full amount in that sense is a calculated move expecting partial to [a] full return of the amount paid.”

Source: news.bitcoin.com


Disclaimer

Crypto News Point a news platform of Digital Notice Media Labs is primarily a regular publication of information, commentary and articles focused extensively on fintech, blockchain technology, cryptocurrency, blockchain-based tokens, cryptocurrency market trends, and trading strategies. We do not provide individually tailored investment advice and does not take a subscriber’s or anyone’s circumstances into consideration when discussing investments, nor is Crypto News Point registered as an investment adviser or broker-dealer in any jurisdiction. Information contained herein is not an offer or solicitation to buy, hold, or sell any digital assets.

Affiliate Disclosure: To help support the work we do here at CNP, we often link to products and deals from around the web. Should you buy some of these, we may get a portion of the sale.

We in generally gather content from the major websites. In every article there is always a clear link and attribution to the source publication. If you have any issue with any of our published content taken from your site, kindly let us know so that we can take appropriate action. In any case, the content of the pages of this website is for your general information and use only. It is subject to change without notice.

You May Also like

Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with an experience of 1 year. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space, as she loves writing about blockchain and other blockchain-related articles. Currently, she is working on blockchain-based news, reviews, featured articles, and guides.
Share This

Share This

Share this post with your friends!