G20 pushing for international crypto taxation
The G20, the group representing the world's largest 20 economies, is wrapping up their meeting in Buenos Aires, Argentina. Among the myriad of items on the agenda was cryptocurrency and the group has announced that it is exploring the possibility of introducing both a regulatory framework and a tax framework for the crypto space. If everything goes according to their plans, crypto taxes could be introduced before the end of 2020.
The push for an international crypto tax was apparently led by Japan. Companies that do business in the country, but which have no physical presence there, are not obligated to pay taxes on crypto transactions. This is similar to the same tax structure found in a number of countries, and is a loophole that has been exploited by many individuals and countries. Japan is hoping to close the loophole.
According to a G20 statement, "We will continue to work together to seek a consensus-based solution to address the impacts of the digitalization of the economy on the international tax system with an update in 2019 and a final report by 2020."
Japan is set to take over the G20 presidency next year. Given its position on the subject of crypto taxes, the odds of an international tax framework being introduced are very high.
Additionally, the G20 indicated that it is working on crypto regulations that would mirror the standards created by the Financial Action Task Force (FATF). The group explained, "We look forward to continued progress on achieving resilient non-bank financial intermediation. We will step up efforts to ensure that the potential benefits of technology in the financial sector can be realized while risks are mitigated. We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed."
While many in the crypto ecosystem have believed that digital currency shouldn't have any governmental oversight, it is only inevitable. It is also the only way that crypto will be able to thrive as the legitimate currency that it was meant to be.