The IMF proposes standardizing taxation for the digital industry and is exploring cryptocurrency taxation
Date: 2023-09-21 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, IN WORLD
The IMF proposes to standardize the taxation of the digital industry
The IMF proposes to standardize the taxation of the digital industry globally, including electronic transfers, starting in 2024. This proposal challenges the tax practices of major technology companies such as Alphabet, Microsoft, Apple, and Netflix, which often do not account for tax obligations to third countries.
Budget Losses and Competition Among Companies:
Many countries face budget losses due to the opaque tax practices of internet giants. Users in these countries use the services of these companies, but local budgets do not receive profits. Meanwhile, local companies that pay taxes compete on unequal terms with multinational corporations.
Assessment of the Scale of Losses and the Complexity of Cryptocurrency Taxation:
The Organization for Economic Cooperation and Development (OECD) estimates annual budget losses for countries due to the practices of internet giants ranging from $100 billion to $240 billion. The complexity of cryptocurrency taxation is also on the agenda, considering their semi-anonymous nature, dual nature as investment assets and means of payment, and high volatility.
The Need for Developing a Cryptocurrency Taxation Strategy:
An essential part of the IMF's proposal is the need to develop a cryptocurrency taxation strategy. There is disagreement about how to tax cryptocurrencies: as income, capital gains, or gambling. The complexity lies in the fact that tax systems were developed before the advent of blockchain technology, requiring a new approach to taxation.
The Role of Centralized and Decentralized Exchanges:
The IMF highlights the division of the cryptocurrency market between large and small holders. This may require a separate approach to taxation. The organization also believes that centralized exchanges may provide more reliable tax compliance compared to decentralized exchanges, although further research is needed in this area.
Tightening Reporting Requirements for Cryptocurrency Miners:
The IMF proposes tightening reporting requirements for cryptocurrency miners, which could be a starting point for improving tax legislation. Despite their high volatility, cryptocurrencies are not considered an efficient means of tax evasion due to high fees.
These steps are aimed at resolving tax issues related to the digital economy and creating a fairer tax system for all market participants.
