coinfomania.com
The United Kingdom (UK) has launched a call for evidence seeking public views on the taxation of crypto-backed loans and staking in the context of decentralized finance (DeFi).
The call for evidence is a formal process used by the UK government to gather information from anyone with relevant knowledge or experience on certain issues.
U.K. Calls for Public Views on Taxation of DeFi Loans
According to the official announcement on Tuesday, UK regulators are interested in gathering views on the taxation of crypto assets and staking from investors, professionals, tax advisory firms, DeFi companies, and other organizations involved in the emerging sector.
The report noted that the call for evidence would last for eight weeks, starting July 5, 2022. Interested parties who want to share their views have until August 31, 2022, to send their response to HMRC.
Alex Bosinceanu, Her Majesty’s Revenue and Customs (HMRC) is the leading official on the call for evidence seeking to critically evaluate whether administrative burdens and costs could be reduced for taxpayers who participate in the DeFi market.
Additionally, the HMRC wants to study and ascertain whether the tax treatment of the lending and staking activities could be better aligned with the fundamental economics of the transaction involved.
U.K. Seeks to Become Global Crypto Hub
As stated in the report, the call for evidence concerns investors who engage with lending and staking only and not other activities on DeFi. It also highlighted that out of scope is the tax treatment of transactions entered into by individuals or organizations as part of a trade like running a platform.
The move correlates with the country’s “next step for the government’s Fintech Sector Strategy,” announced earlier this year at the Innovate Finance Global Summit, which seeks to establish a comprehensive regulatory framework and taxation of crypto assets.
The Fintech Sector Strategy is part of the government’s plans to position Britain at the forefront of the rapid innovation of virtual assets and blockchain technologies to make the country a global hub for digital techs and investments.
Part of the plan involves exploring ways to enhance the competitiveness of the U.K. tax system to promote further development of the crypto asset market.
The report also noted that the government would publish a response to the call for evidence together with details of its next steps.