Bithumb Partially Wins Appeal in $130 Million Corporate Tax Lawsuit

Bithumb Partially Wins Appeal in $130 Million Corporate Tax Lawsuit

Bithumb, one of the largest cryptocurrency exchanges in South Korea, has partially won its appeal in a lawsuit against the Yeoksam Tax Office over $130 million in corporate taxes. According to a report by ChosunBiz, the Seoul High Court's Administrative 1-3 Division ruled that Bithumb's lawsuit to cancel the disposition of tax collection and other income taxes was partially won by the plaintiff. Previously, Bithumb used the 'first-in, first-out method' (FIFO) to value its inventory assets from 2014 to 2016. This method sells the oldest assets first. In 2017, Bithumb switched to the 'total average method', which calculates the average cost of goods purchased over a period of time. The tax authorities claimed that Bithumb's change in valuation method for virtual assets resulted in underreported profits. This led to the imposition of 180 million won in corporate taxes. The court ruled that the tax authorities had not proven that Bithumb's change in valuation method was unreasonable. The court also found that the tax authorities had not considered the impact of the change on Bithumb's business operations. The court's decision is a partial victory for Bithumb. The company will not have to pay the full amount of taxes that were originally demanded by the tax authorities. However, the court's decision also means that Bithumb will have to pay some additional taxes. The amount of these additional taxes has not yet been determined.