The UK will introduce a digital tax on bitcoin exchanges
Under the new bill, all licensed exchanges will be required to pay a 2% tax on digital services
29.11.2021 - 12:50
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What’s new? The UK crypto exchanges will have to pay a 2% tax on digital services. The UK Her Majesty’s Revenue and Customs (HMRC) does not recognize digital assets as financial instruments, so exchanges are not eligible for the exemption. The digital services income tax was introduced in April 2020 for social media and search giants such as Facebook and Google.
What is the market participants’ reaction? The CryptoUK trade association Executive Director Ian Taylor said that such an attitude towards digital assets is damaging the crypto sector:
“There are a wide variety of crypto assets. They do not represent commodities, financial contracts, or money. For this reason, it is unlikely that bitcoin exchanges can benefit from the tax exemption provided for online financial marketplaces.”
He added that this is another heavy blow to the industry following the strict licensing system imposed by the Financial Conduct Authority (FCA) on exchanges. Since January, all the UK crypto-asset companies have had to comply with AML (anti-money laundering) rules and register with the tax authority.
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