Bithumb Takes the Korean Tax Authority to the Court

Bithumb Brings Korean Tax Authorities to Court for 'Unwarranted' Crypto Taxes

Bithumb, a large crypto exchange in South Korea, has brought the country's tax authorities to justice for the "baseless" taxes imposed on the exchange. Experts explain that there is currently no reason to conduct crypto tax transactions in South Korea and existing tax laws do not apply to crypto transactions.

Bithumb Trys to Eliminate Tax Bills

While South Korea does not currently have laws to impose crypto profit tax, the country's National Tax Service (NTS) has imposed a tax of 80.3 billion won ($ 69 million) on Bithumb. Bithumb is one of the largest crypto exchanges in the country.

Bithumb then filed a complaint with the country's Tax Court against NTS alleging that imposing agency tax on him was "baseless," reports the Korea Times, explaining:

"The company Bithumb said that cryptocurrencies are not legal money in South Korea and so the Tax Court has no reason to impose taxes of any kind."

The Tax Court has 90 days to determine whether to give or dismiss the Bithumb motion that seeks to cancel 80.3 billion won in tax cuts imposed by NTS, the news outlet added. "We cannot comment on the ongoing problem. We will wait for the decision from the Tax Court, "said an NTS official.

Motives and NTS Methods Used

Experts have speculated about why 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 recently explained that individual investors' crypto profits are not taxed in South Korea. However, work is underway to change the tax code to enable taxation of crypto currencies.

The Financial Services Advisor (Choi Hwoa-in), explained to the Korea Times that with more and more traders benefitting from cryptocurrency over the past few years, tax authorities have seen this sector as a new source of tax revenue.

Choi suspects that "NTS puts this issue at the center and public discourse in an ingenious step that seeks to establish reasons for levying taxes," the publication conveyed.