Media: India to levy 18% tax on foreign cryptocurrency exchanges

The Indian government is considering introducing an additional 18% tax on foreign cryptocurrency exchanges offering services to residents. The Economic Times reports, citing informed sources.

According to the publication, such trading platforms do not currently pay налог на товары и услуги.

The Indian tax regulator classifies their activity as services for access to information and online databases. At the same time, if the supplier is abroad and the client is in the country, transactions are treated as imports of services.

ET experts interviewed stressed that Indian authorities have not clarified to local bitcoin exchanges what exactly should be considered the taxable base, nor have they specified the tax rate. In the absence of regulatory clarity, most companies pay 18% on the entire margin or commissions they charge.

The publication also noted that many Indian investors are now using overseas trading platforms, as most local banks and payment systems refuse to work with organisations linked to digital assets.

In May, ForkLog reported that the central bank of the country asked banks to sever ties with bitcoin exchanges. Following this, the regulator urged supervised institutions not to cite the withdrawn directive prohibiting cryptocurrency operations.

In June, the media learned of India’s plans to impose a 2% tax on digital assets purchased on foreign exchanges.

Earlier for Parliament consideration a bill proposing a ban on cryptocurrencies was introduced, but it was never submitted. Later Bloomberg reported that the government planned to consider the possibility of regulating the class of digital assets.

As of 2020, Chainalysis estimated the number of crypto investors in India at 15 million, and the value of their assets at $38.8 billion.

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