UK digital service tax targets cryptocurrency exchanges
The recent update to the UK Revenue and Customs (HMRC) regulations introduced a digital service tax, which will be levied on cryptocurrency exchanges operating in the UK.
According to The Telegraph, UK cryptocurrency exchanges now have to pay a 2% digital service tax reportThe UK tax authority HMRC does not recognize digital assets as financial instruments, so exchanges are not eligible for financial exemption.
On November 28, the agency included cryptocurrency transactions in the technology tax of the Ministry of Finance.The digital service tax on income is introduce In April 2020, targeting social media and search giants such as Facebook and Google.
As the regulator explained, the latest crackdown on cryptocurrency exchanges is the result of HMRC’s classification of crypto assets:
“There are various types of crypto assets, and each asset has different characteristics. It stated that since cryptocurrencies do not represent commodities, financial contracts or currencies, crypto asset exchanges are unlikely to benefit from exemptions from online financial markets. “
According to CryptoUK, a trading agency that represents the UK’s digital asset industry, this tax is unfair and is likely to be passed on to investors and traders.
Executive Director Ian Taylor said that treating cryptocurrencies differently from other financial instruments (such as stocks or commodities) is not conducive to the crypto industry.
He added that this is another heavy blow to the industry following the strict licensing system introduced by the Financial Conduct Authority (FCA) for exchanges. Since January, all UK crypto asset companies must comply with AML (anti-money laundering) regulations and register with the FCA.
Regulator Prohibition of crypto derivatives January and June, FCA Warns consumers to pay attention to 111 crypto companies Not yet registered.
In April of this year, Cointelegraph reported that HMRC is stepping up efforts to trap crypto tax evaders, and put forward clear requirements on the details of digital asset holdings on the self-assessment form.
According to reports, the UK tax authority requires several crypto asset exchanges Transfer customer details from transactions and holdings August 2019.