South Korean crypto exchange Bithumb has appealed to the tribunal against the National Tax Service’s (NTS) order to pay $69 million in withheld tax.
Reported by The Korean Times on Thursday, the exchange is claiming that the withholding taxation was imposed based on “groundless” rules. It also stresses that the South Korean law does not recognize digital currencies, giving the agency no authority to impose such tax.
The tax authority imposed the hefty withholding tax on the local crypto exchange in November. However, the move created a negative buzz in the industry as the tax agency has no clear assessment standard for crypto businesses.
Per the NTS, the gains on the platform made by its foreign clients are also taxable in the country, while the exchange is refuting this too.
Did COVID-19 Save the Forex Industry?Go to article >>
“We paid the full amount and have since been preparing for arguments. We believe we will be given a chance to clarify our stance in court,” an official from the exchange told the local news outlet.
As the tax tribunal accepted Bithumb’s appeal, it will have 90 days to determine whether to grant or dismiss the exchange’s motion to nullify $69 million in withholding tax.
Confusion around crypto taxation
Meanwhile, various departments in the South Korean government are looking at crypto taxation differently. While one ministry was pushing to impose capital gains tax on crypto earnings, another ministry officially notified that profits from crypto cannot be taxed under current laws.
“Bitcoin under the current law is not an asset. It is clear and simple,” Choi Hwoa-in, an adviser to Financial Supervisory Service, told The Korea Times.
“The Ministry of Economy and Finance already made that clear. The NTS pushing ahead with the tax imposition is baseless and groundless, especially since it is still awaiting the ministry opinion on the same matter it sought again.”