- South Korean based exchange, Bithumb, set to go to court to challenge NFT’s latest $69 million USD tax imposition.
- The court has 90 days to give a ruling on the matter.
- Is a clear tax regulation framework being put in place in South Korea?
According to local reports from The Korean Times, the largest crypto exchange in the country is challenging the latest tax imposed by the National Tax Service (NTS) in a Tax Tribunal in what it terms as a groundless base. The government taxing agency imposed over 80 billion Korean won ($69 million USD) in November last year claiming the exchange should pay up “withholding tax”.
According to one Bithumb official, the amount was already paid but said the exchange will move to court to challenge the NTS directive to pay the retainer tax. The NTS remains adamant on the fact that any profits paid out to investors in Korean won, should be considered as income.
This has however been refuted by a couple of cryptocurrency and blockchain experts and lawyers in the financial field such as Choi Hwoa-in, an adviser to Financial Supervisory Service. Bitcoin is not recognized as an asset in the country hence taxing it is against the law. Choi said,
“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.”
The Tax Tribunal will now have a 90 days period to work on the case and give a ruling on whether Bithumb will be refunded the amount paid or let the tax levied to Bithumb to stand. Choi said this was a calculated move by the exchange, who may see part of the tax paid, or the whole amount.
Regulation in South Korea may be getting better with the latest case set to set precedence. The tax regulation case will be a key tipping point in cryptocurrency regulation in South Korea, a country known for progressive technological innovations. NTS also taxed Bithumb $28 million USD last year on retainer’s levies.