The National Tax Service of South Korea (NTS) has concluded plans to slam crypto exchange Bithumb with a heavy withholding tax. Bithumb, South Korea’s largest exchange platform, will have to give up 80.3 billion won, roughly $70 million.
According to a Coindesk report, the withholding tax will be imposed on the exchange’s foreign clients. If the NTS proceeds, it will be the first time the South Korean government will impose a tax on cryptocurrency transactions. This is especially curious because the country does not have proper laws on digital assets.
A news report from Korea JoongAng Daily suggests that the tax might not go exactly as NTS has intended. Quoting Bithumb’s largest shareholder Vident, it says:
“Bithumb Korea is planning to take legal action against the tax claim so the final payment can be adjusted in the future.”
The report also categorizes the exchange’s foreign crypto payments as “miscellaneous income.” This tag refers to income that isn’t regular, such as lottery profits. South Korea’s withholding tax rate for miscellaneous income is set at 22 per cent. It also says that the NTS reached its 80.3 billion won figure from the total withdrawals of Bithumb’s foreign customers.
Bithumb is yet to comment officially on the situation.
Back in April, the exchange lost about $19 million worth of EOS and XRP to hackers.
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