In a recent development, South Korean gaming company WeMade has been ordered by the National Tax Service to pay back $42 million related to its cryptocurrency business. The tax demand follows an extensive corporate tax audit covering the years 2019 to 2022.
The announcement was made by WeMade on the 3rd of the month, revealing that the central regional National Tax Service of Korea had completed its investigation, resulting in a tax obligation. The taxes to be paid back, which represent 10.05% of the company’s equity, are due by the 29th of February.
The assessed amount includes figures for both WeMade and its subsidiary WeMade Tree. WeMade Tree, established in January 2018 to enter the Blockchain sector, played a significant role in the cryptocurrency business under review and was merged with WeMade in February 2022. Tax authorities took into account the financial situations of both entities while determining the back tax amount.
The investigation by the Korea National Tax Service specifically focused on the cryptocurrency WEMIX, previously issued and utilized by WeMade and WeMade Tree. The decision to collect back taxes was based on the findings of this examination.
A WeMade spokesperson stated, “We plan to pay the taxes arising from the accounting and tax processes of Wemix honestly from 2019 to 2022. As the tax treatment of crypto assets becomes more definite, the company’s business stability will also increase.”
The retrospective tax application to WeMade reflects the evolving landscape of cryptocurrency taxation in South Korea. As tax authorities scrutinize businesses in the crypto sector, companies are challenged to navigate a complex regulatory environment. WeMade’s commitment to transparently addressing its tax liabilities indicates a proactive approach to compliance. The spokesperson’s acknowledgment of increasing certainty in the taxation of crypto assets underscores the broader impact of such regulations on the stability and future outlook of companies operating in the Blockchain and gaming industries. Consequently, WeMade’s encounter with the National Tax Service highlights the importance of comprehensive tax compliance in the dynamic world of crypto assets. As regulatory frameworks continue to evolve, companies must adapt to ensure the sustainability of their operations and maintain trust among stakeholders.