Reportedly a piece of news has been confirmed that the National Tax Service of South Korea (NTS) is going to withhold tax worth $70 million from Bithumb, which is the largest crypto exchange of South Korea. The tax then will be imposed on its foreign customers and this is not likely to be happened. Fact is that the taxation agency of the country has imposed tax on gains from cryptocurrency transaction. Though the decision is bitter to Bithumb Korea, it is attempting to take legal action against the tax claim and so the final payment can be adjusted in the future.
The calculation process of the amount of tax is done on the basis of miscellaneous incomes and reportedly the tax is collected at an annualized rate at 22 percent. But what impacts will cause to related parties is unknown but there is no comment from Bithumb. As the initial target of tax office is the foreign customers trading cryptocurrency on the Bithumb exchange, withholding tax is paid to the government by the party that pays money to Bithumb rather than customers.
If you think on the basis of reality it’s seems impossible for Bithumb to pay 80.3 billion won and then collect the amount from its foreign clients. Actually foreigners still are using the country’s trading platform even after reportedly the Korean government put a ban of them to open accounts on crypto exchanges in December 2017. But after the ban was announced, transactions started being done with fake names so it makes a puzzling consequence to the exchange to identify the number of investors and their trading profits indeed. But fact is that taxation process is not yet applied on cryptocurrency in the country. But the Ministry of Economy and Finance of the country has said they will introduce regulations for taxing crypto.