OECD release on taxing virtual currencies: An overview of tax treatments and emerging tax policy

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October 2020

Overview

The OECD has just released their paper OECD 2020: Taxing Virtual Currencies: An Overview of Tax Treatments and Emerging Tax Policy Issues.   

The report addresses the rapid change in this emerging asset class, as well as the breadth of the applications of virtual currencies.  In addition, it is clear that the increased interest in virtual currencies that we have seen from tax authorities and other regulators shows that this asset class is now getting serious attention from policymakers.

The report has been prepared for presentation to the October 2020 meeting of G20 Finance Ministers and Central Bank Governors. It provides key insights and a number of considerations to help policymakers wishing to improve their tax policy frameworks for virtual currencies and is an important development in the evolution of tax guidance regarding virtual currencies internationally.

The takeaway

While the report didn't provide specific recommendations, it highlighted a few key areas for further considerations:

  • the need for clearer, consistent and regularly updated guidance for this rapidly emerging asset class

  • the importance of simplified rules that take into account the different use cases and the types of users (individuals vs. traders, funds, exchanges, etc.) and 

  • the benefits of better alignment of the existing and future tax guidance with the broader policy objectives.

The taxation of virtual currencies continues to evolve on a global scale.  Regulators in various jurisdictions are focused not only on questions of characterization and timing, but also enforcement.  Staying on the forefront of these emerging issues is key for any company navigating this space.

 

See also

 

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Bernard Moens

US Inbound International Tax Services Leader, PwC US

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