Here we go again with our central South Korean trading platform Bithumb which has won a mighty supporter in its journey to confront an odd multi-million tax bill after an MP and governmental finance committee member declared the nation’s tax authority’s $67 million tax bill – given to the crypto exchange late last year – has no legal basis.
As reported by E Daily, Park Hyung-soo, a member of the National Assembly’s Planning and Finance Committee and an MP for the largest opposition party, the People Power Party, stated that the National Tax Service’s claim was “devoid of legal grounds.”
The National Tax Service sent shockwaves across the crypto community last year when, without prior warning, it served the bill up to Bithumb. The tax authority said that Bithumb had failed to tax foreign nationals and non-South Korean residents on their transactions. And rather than pursuing individual traders, it stated that the exchange itself was liable – and thus obliged to cough up the $67 million itself.
Park stated that the administration backs his petition, noting that the Ministry of Economy and Finance has previously responded to a National Assembly request for comment, saying,
“Private individuals’ profits from [cryptoasset] transactions are not currently listed under current income tax law regulations. As such, such transactions are not subject to income tax.”
Nevertheless, all that might change next year with strict crypto tax restrictions set to come into force from October 2021 – when all traders in the country, be they South Korean citizens or not, should be obliged to submit tax declarations on their crypto earnings.
Though, Park insisted the matter of future taxation requirements was irrelevant in cases dating back to 2019, adding,
“Under the current law, personal [cryptoasset] transaction-related income, both domestic or overseas, is not regulated and cannot be taxed.”
Bithumb has begun a legal case against the tax authority and is hopeful of overturning the ruling.