Chinese authorities have fined leading crypto-mining hardware maker Bitmain for tax-related violations, local media reported. The sanction comes as tax audits increase in the digital asset sector, according to reports from the crypto community.
Bitmain fined for failing to pay income tax on behalf of employees
One of the world’s largest producers of devices designed for cryptocurrency mining, Bitmain, has reportedly been fined for unpaid taxes. The news was shared on social media by Chinese crypto-journalist Colin Wu, also known by his Twitter handle “Wu Blockchain”.
Bitmain, the world’s largest bitcoin mining machine company, was fined about $3.55 million by the Beijing Tax Bureau in April, mostly for unpaid income taxes.
– Wu Blockchain (@WuBlockchain) April 11, 2023
Wu referred to a report by Sina Finance on Tuesday that Beijing Bitmain Technology faces a hefty fine of nearly 25 million yuan (over $3.6 million at the time of writing) imposed by the Chinese capital’s municipal tax bureau.
The company allegedly failed to withhold and pay personal income tax on benefits provided to its employees, such as travel grants. The amount, due under the People’s Republic Tax Collection and Administration Law, exceeds 16.6 million yuan (over $2.4 million).
Bitmain was notified by the Beijing Tax Authority of its obligations in August 2022, the publication further notes. However, the company has yet to withhold and pay the aforementioned personal income tax, Sina Finance wrote.
In a sequel Tweeter, Wu Blockchain pointed out that the Chinese government has stepped up tax controls on the cryptocurrency industry since last year. According to the crypto blogger, bitcoin miners and large cryptocurrency traders have been specifically targeted.
Following China’s crackdown on crypto-related activities like mining in early 2021, Bitmain announced in October of the same year that it was ending mining equipment shipments to mainland customers. According to media reports, the Beijing-based company, which manufactures application-specific integrated circuits (ASICs) mining platforms, was also planning to move most of its production elsewhere in the region.
Do you think the Chinese tax authorities will increase the pressure on crypto companies still operating in the country? Share your thoughts on the subject in the comments section below.
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