A major South Korean cryptocurrency exchange, Bithump, filed a crypto tax dispute with the NTS, South Korea’s IRS, over a $70 million bill. The company argues it shouldn’t have to pay taxes on cryptocurrency gains because the South Korean government doesn’t recognize tokens as legal tender.
90 Days to Dismiss or Grant Crypto Tax Lawsuit
A tribunal has 90 days to review the complaint and either grant or dismiss it. Because the tax is tied to employees, Bithump paid up but hopes for a refund if it wins the case. The company explained:”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.”
Potential Long-term Impact of South Korean Crypto Tax Case
The action could impact how cryptocurrencies are recognized in South Korea, and thus the international crypto community. The government wants to capture tax revenue from industry profits. As such, lawmakers may soon declare tokens a taxable form of income.
Experts speculate that NTS may have issued Bithumb a hefty tax bill because lawmakers want to amend the tax code to include crypto gains. Choi Hwoa-in, a financial advisor, told the Korea Times that due to the growing popularity of crypto trading, the country’s tax authorities are salivating at a new source of revenue. He speculates that the NTS is purposefully and cleverly dragging the issue into the public arena as a way to test drive the issue.
Conversely, Ahn Chang-nam, a professor at Kangnam University, argues that it would be incredibly difficult for the South Korean government to track every crypto transaction. She believes the best approach is the current one: classifying crypto as miscellaneous assets.
Connect with an International Cryptocurrency Lawyer
The Gordon Law Group helps individuals and businesses navigate the international cryptocurrency maze. If you need digital-token tax help or someone to litigate a cross-border crypto dispute, our team has experience.
Give us a call today. We’ll confidentiality discuss your situation and advise on next steps. If we’re not the right fit for your needs, we’ll try to pass you on to a firm that is.