Crypto tax may soon see its own version of the Common Reporting Standard (CRS) as the Organisation for Economic Co-operation and Development (OECD) is reportedly working on a unified approach to handling virtual currency taxation. The news comes as several G20 countries are mandating stricter compliance to national tax laws for traders, exchanges, and other industry participants.
OECD Plans CRS-based Crypto Tax Reporting Standard in 2021
According to a report by Law 360, the OECD is set to create a crypto tax reporting standard based on the global CRS principles. Commenting on the plans, OECD tax policy administrator Pascal Saint-Amans remarked that the move is based on calls from several quarters for a unified approach to dealing with cryptocurrency taxation to prevent the emergence of regulatory arbitrage.
Back in 2014, the OECD developed the CRS as a means of combating tax evasion and the body hopes to utilize the same principles in its work on crypto taxes. In an interview quoted by Law360, Saint-Amans revealed:
“Fundamentally the idea is to have a standard which would be roughly equivalent to the CRS, if it is not the CRS. The timeline to deliver is probably ’21, sometime in ’21, because there is appetite by all countries now.”
The OECD tax policy administrator also revealed that the planned crypto tax reporting standard will complement the work already in progress in Europe. The EU is reportedly working towards including cryptocurrencies in its directive on administrative cooperation (DAC) in a further extension of existing financial laws to cover the novel virtual currency market in the region.
According to Law360, the EU Commission is keen to avoid any inconsistencies between its efforts and those of the OECD is handling crypto tax issues.
Across the globe, several nations are enacting specific crypto taxation laws while warning against tax evasion. As previously reported by BTCManager, South Korea may postpone the enforcement of its planned virtual currency tax regime until 2022 to provide ample time for stakeholders to work on the necessary compliance modalities.
Indeed, crypto tax laws are becoming a measure of how countries perceive the cryptocurrency market. Countries like Singapore have exempted income from airdrops and hard forks from their taxation regime while others like Iran offer tax breaks to miners who repatriate foreign earnings.
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