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UK Crypto Exchanges Will Pay Tax On Digital Services

Anna Martynova

Following the classification of cryptocurrencies, Her Majesty's Revenue and Customs (HMRC) introduced a 2% tax on digital services revenue for crypto exchanges. As the regulator explained, 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.

Cryptocurrency companies in the UK believe that this attitude towards digital assets is detrimental to the development of the industry. The cost of the tax is likely to be included in the fees for services for investors and traders. This is another hard blow to the industry after the UK Financial Conduct Authority (FCA) introduced a strict licensing system for crypto exchanges.

As of January, all UK cryptocurrency companies must comply with AML regulations and register with the FCA. The UK Financial Conduct Authority will allocate $670,000 for the training of personnel who will identify schemes for the use of cryptocurrencies in illegal activities.

Image: Business Recorder

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