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

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.


Crypto Exchange Bithumb Takes Korean Tax Authority to Court Over $69 Million ‘Groundless’ Tax 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. https://t.co/JVCbBKz2tL #bitcoin — Jeromy Rothen(₿)erg (@CryptoCoach_J) January 17, 2020

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.

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.

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

#TaxAuthority #SouthKorea #CryptoNewsPoint #DigitalNotice #NationalTaxServiceNTS #bithumb

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