. 1 min read

South Korean MP Calls Tax Authority’s Bithumb USD 67m Bill ‘Baseless’

Disclosure: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. By using this website, you agree to our terms and conditions. We may utilise affiliate links within our content, and receive commission.

South Korean trading platform Bithumb has won a powerful supporter in its quest to fight an unprecedented multi-million tax bill after an MP and parliamentary finance committee member claimed the nation’s tax authority’s USD 67m tax bill – served to the crypto exchange late last year – has no legal base.

Source: Adobe/prima91

Per 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 USD 67m itself.

Park said that the government supports 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.”

All that might change next year, however, 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.

However, Park claimed 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 launched a legal case against the tax authority, and is hopeful of overturning the ruling.


Learn more:
Crypto Exchange Bithumb ‘Not Liable’ for Customer’s USD 401,000 Losses
Broker Confirms that Bithumb is up for Sale, Big Players ‘Interested’
Police Summon Bithumb Chairman for Questioning on Suspicions of Fraud
South Korea May Review Crypto Tax Law ahead of 2021 Regulations