Taxing Cryptocurrencies

Katherine Baer, Ruud A. Mooij, Shafik Hebous and Michael Keen

No 2023/144, IMF Working Papers from International Monetary Fund

Abstract: Policymakers are struggling to accommodate cryptocurrencies within tax systems not designed to handle them; this paper reviews the issues that arise. The greatest challenges are for implementation: crypto’s quasi-anonymity is an inherent obstacle to third-party reporting. Design problems arise from cryptocurrencies’ dual nature as investment assets and means of payment: more straightforward is a compelling case for corrective taxation of carbon-intensive mining. Ownership is highly concentrated at the top, but many crypto investors have only moderate incomes. The capital gains tax revenue at stake worldwide may be in the tens of billions of dollars, but the more profound risks may ultimately be for VAT/sales taxes.

Keywords: Cryptocurrency; virtual assets; tax evasion; tax compliance; Bitcoin; sales taxation; B VAT; income taxation; tax authorities; bitcoin transaction; intrinsic value; Virtual currencies; Blockchain and DLT; Currencies; Capital gains tax; Value-added tax; Global (search for similar items in EconPapers)
Pages: 35
Date: 2023-07-05
New Economics Papers: this item is included in nep-pay, nep-pbe and nep-pub
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Citations: View citations in EconPapers (5)

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Journal Article: Taxing cryptocurrencies (2023)
Working Paper: Taxing Cryptocurrencies (2023)
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