OECD preparing cryptocurrency tax framework for 2021
The Organisation for Economic Co-operation and Development (OECD) has released a tax report to the G20, it plans to pitch leaders of the world’s largest economies on a framework for cryptocurrency tax reporting in 2021.
The guidelines will offer tax authorities guardrails for clarifying their local treatment of cryptocurrencies while also accounting for “international exchanges”.
This is an international framework for tax reporting that ensures tax transparency on cryptocurrencies and aims to reflect the “dynamic and highly mobile nature” of cryptocurrencies.
The report said:
Even if covered under existing laws on the taxation of property assets or capital gains, at a minimum, guidance on how virtual currencies fit within the existing tax framework may be useful, in order to promote clarity and certainty for taxpayers. If existing laws are unclear or not adapted to virtual currencies given their special characteristics (e.g. price volatility, hybrid nature, type and number of transactions, creation protocols) then governments may wish to consider issuing specific guidance. In some cases amendments to existing regulatory provisions, or even specific regulation for these assets, may be useful to ensure the legislative framework is also clear. Similarly, providing a definition of virtual currencies for tax purposes may be helpful.
The OECD also published a separate report entitled “Taxing Virtual Currencies” on October 12, and conducted a survey in more than 50 countries and regions to explain the current tax treatment methods for cryptocurrencies.
The report said that if existing legislation is unclear or not created with the peculiarities of cryptocurrencies in mind, it is recommended to consider issuing more specific guidance.
Last week, G7, an organization of finance ministers and central bank governors representing the United States, Canada, United Kingdom, Germany, France, Italy and Japan — said that it is working with the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements (BIS) to formalize the use of central bank digital currencies (CBDC) in banking systems.
According to a new report, by the end of 2022, the G7, the IMF, the World Bank and the BIS will have completed regulatory stablecoin frameworks and research and selection of CBDC designs, technologies and experiments.
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