2% digital services tax on UK crypto exchanges: Reports

Now all the crypto exchanges in the United Kingdom will have to pay a 2% tax on their digital assets-based services. 

In the present time, crypto services are evolving at the best rate and with the evolution, they are facing new challenges because of the financial regulators. Two weeks ago, a US $1 trillion infrastructure bill passed that imposed a big restriction on the crypto industry, in order to grab huge tax revenue. And now UK authorities are eying on the crypto exchanges to grab taxes. 

On 28 November, HMRC- Tax authority of Britain, announced that they will no longer consider crypto/digital assets based financial services as financial instruments and they will consider it under the Treasury’s tech tax. So now all the crypto inclined services in the UK are not able to receive financial exemptions. 

Under the Treasury Tax system, all these crypto exchanges needed to have to pay around 2% taxes on their digital assets services. 

Treasury’ Tech tax system was introduced in April 2020 to target all the internet-based services like Social media platforms Facebook. And also it includes Google search engines. 

During the classification of the crypto exchanges under Treasury Tech tax, HMRC agency said: 

“There are a wide variety of crypto assets, each with different characteristics. It said that because cryptocurrencies do not represent commodities, financial contracts, or money, it is unlikely that crypto-asset exchanges can benefit from the exemption for online financial marketplaces.”

It is worth noting, at present time, the tax agency raised their concern over the class of the crypto assets, which indicates that crypto is not part of the financial system. Then what they were thinking before this. Probably these things are clear indications that they are going to generate revenue instead of giving definition or clarification on the digital assets. 

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