Legal Challenges and Approaches to Taxation of Digital Asset Transactions

Nataliia Strutovska

No uy3rq_v1, LawArchive from Center for Open Science

Abstract: Introduction. In the modern digital economy, transactions involving digital assets represent one of the most complex challenges in the field of financial law and tax administration. The absence of a unified legal definition of digital assets across different jurisdictions leads to conflicts in their classification as property, goods, currency, or financial instruments. Such discrepancies create conditions for “regulatory arbitrage” and increase the risks of tax evasion in the cross-border space. The rapid development of the cryptocurrency market and the implementation of blockchain technologies generate new challenges for national tax systems and necessitate the harmonization of legal approaches at the global level. Purpose. The purpose of the study is to conduct a comprehensive analysis of the legal challenges and approaches to the taxation of digital asset transactions, to identify the advantages and limitations of existing models in the European Union, the United States, and Asia, and to determine the directions of international harmonization in the context of financial digitalization. Materials and Methods. The materials of the study include scientific publications and regulatory legal acts concerning the legal status of digital assets and the practice of their taxation. The methodological framework is based on comparative legal analysis, logical generalization, systematization, and bibliometric review of modern research. An analytical approach without empirical data was applied to assess the impact of technological innovations. Results. The article systematizes approaches to the definition of digital assets in major jurisdictions and analyzes their tax regimes. It is established that the absence of a unified legal approach hinders the development of a stable international taxation system. The paper reveals the application of the MiCA Regulation in the EU, the fragmented U.S. model, and the polar scenarios of Asian countries. The results of pilot projects in the United Kingdom and Estonia on the use of blockchain technologies in tax administration are presented. It is proven that the effectiveness of digital solutions depends on the institutional capacity of the state and the level of international coordination. Prospects. Further research should focus on developing a model for a harmonized legal definition of digital assets, unifying approaches to their taxation, and creating unified standards for the use of blockchain technologies in tax administration systems. This will help reduce regulatory fragmentation and enhance the transparency of the global financial market.

Date: 2025-09-30
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Persistent link: https://EconPapers.repec.org/RePEc:osf:lawarc:uy3rq_v1

DOI: 10.31219/osf.io/uy3rq_v1

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