Crypto taxes in the modern world: International cooperation for sustainable collection

In an era where digital finance has become a part of the global economy, the taxation of cryptocurrencies has become an issue that governments around the world must confront, both in terms of policy creation and the enforcement of tax collection standards. Cooperation between countries has thus become a crucial element in making cryptocurrency taxation fairer and more efficient.

The importance of crypto taxes

The growth of the crypto market has led many countries to see opportunities in taxing transactions such as buying, selling, investing, or using crypto for payments. Taxing crypto is important for both the government and the economy for the following reasons.

A new source of revenue for the government

• Taxes on profits from cryptocurrency investments can help generate revenue for the government to use in national development projects.

Creating financial equity

• Taxing cryptocurrencies makes the financial system more equitable, especially when compared to traditional assets such as stocks, bonds, and real estate, which are also subject to taxation.

Control the risks of money laundering and tax evasion.

• Establishing clear regulations regarding crypto taxe will help prevent money laundering and tax evasion through crypto transactions.

The challenges of cryptocurrency taxation

Even though taxing crypto is important, there are still various issues such as

The borderless nature of crypto

• Cryptocurrency transactions can be conducted globally at high speed, making it difficult to verify transactions and trace the source of income.

The anonymity of users

• Many blockchain networks, such as Bitcoin, allow users to conduct transactions without revealing their identities.

The differences in tax policies in each country

• In some countries, there are strict tax regulations for crypto, while in others, there are no regulations at all regarding crypto taxes, creating loopholes for tax evasion.

Legal interpretation

• The definitions of digital assets and cryptocurrencies continue to vary from country to country, making tax rate determination more complex and tax collection more challenging.

International cooperation in tax collection

To address these challenges, many countries have begun to collaborate to establish transparent and efficient standards for crypto tax collection, such as

The exchange of transaction data

• The creation of a central system for exchanging international transaction data, such as the OECD's proposal of the Crypto-Asset Reporting Framework (CARF), which is a new standard for reporting international digital asset information.

The establishment of a common minimum tax rate

• Similar to the concept of a minimum tax for multinational corporations, many countries are discussing the establishment of a minimum tax rate for profits from cryptocurrency investments.

The development of regulations regarding Exchanges and Wallets

• Forcing Crypto Exchange providers and digital wallet service providers to report transactions to tax authorities.

The use of technology in transaction monitoring (Blockchain Analytics)

• Many governments are using blockchain analysis technology to trace suspicious transactions and track tax evasion.

The creation of a joint legal framework (International Regulatory Framework)

• International financial institutions such as the IMF and G20 are accelerating the development of a legal framework for global crypto taxation.

Tax measures in different countries

Each country has different policies and developments regarding crypto tax laws, such as

United States

• The IRS (Internal Revenue Service) classifies cryptocurrency as an asset, requiring cryptocurrency holders to report gains and losses from buying and selling to calculate taxes.
• Profits from selling crypto are considered Capital Gain Tax, which is divided into short-term and long-term.

Japan

• Cryptocurrency is classified as a financial asset.
• Income from crypto is subject to personal income tax, with a maximum rate of 55%.

Thailand

• Profits from cryptocurrency sales are classified as assessable income under the Revenue Code.
• A withholding tax of 15% is levied on investment profits.

The taxation of crypto in the modern world requires cooperation from all sectors, especially international collaboration to create universal, transparent, and enforceable standards. Developing appropriate regulations and utilizing technology for verification will make the crypto tax system sustainable and help the global economy advance alongside cutting-edge technology in the digital age.