The OECD released a new report on Monday 12 October on the taxation of virtual currencies, to be presented to G20 Finance Ministers on Wednesday. Covering more than 50 jurisdictions, the report is “the first comprehensive analysis of the approaches across the main tax types”, the organisation says.
While the implications for financial stability and the fight against money laundering have largely been addressed by international organisations, the OECD believes that the fiscal policy aspects of virtual currencies have so far remained unexplored.
Yet, according to the organisation, the exchangeability of virtual currencies with fiat currencies and their similarities to other forms of financial products means that “a sound tax policy framework is necessary to ensure the consistent treatment of similar asset types, to facilitate compliance, provide tax certainty, and prevent tax avoidance and evasion”.
The report also looks at the emergence of ‘stablecoins’, such as Facebook’s Libra cryptocurrency. Here, no international consensus exists yet. Some believe that they should be treated in the same way as traditional virtual currencies, while others are of the opinion that they could be taxed as a security or even a foreign currency, according to the report.
In general, the report recommends that policymakers wishing to strengthen their framework for the taxation of virtual currencies should provide clear guidance to ensure consistency with the treatment of other assets.
It also advocates supporting improved compliance, including through the consideration of simplified rules on valuation and on exemption thresholds for small trades; and aligning the tax treatment of virtual currencies with other policy objectives such as, for example, the decline in cash use or environmental policy.
The OECD is also working on detailed technical proposals for a new tax reporting framework for crypto-assets, which it intends to present to the G20 in 2021.
See report: https://bit.ly/314Db4z (Original version in French by Marion Fontana)