Largest South Korean Crypto Exchange Imposed With $69.3 Million in Taxes
South Korea’s largest crypto exchange, Bithumb Korea, was slapped with a tax bill amounting to 80.3 billion Won ($69.3 million). This was the first time that the country levied a tax on cryptocurrency trading.
On Friday, the largest shareholder of Bithumb, Vidente Co., confirmed that the National Tax Service (NTS) claimed tax from the exchange. However, it said that the final payment might differ from the claim as Bithumb Korea is thinking of taking legal actions. This move comes before the country undertakes legal reformation to tax profits earned from cryptocurrency next year.
As per the taxation laws of South Korea, it is obligatory for the income payer to withhold taxes on the income earned by overseas residents by selling assets in Korea. Withholding tax denotes the income tax that is paid by the one paying the income; the tax is withheld or paid from the returns in advance. The NTS classified cryptocurrency trading of non-nationals as miscellaneous income. Therefore, categorizing capital profits earned from crypto trading as “assets.” This became the basis for NTS to levy a tax on Bithumb. In January last year, the country’s taxation authority had concluded that Bithumb did not meet the requirement of withholding taxes of its overseas customers.