IMF Working Papers

Taxing Cryptocurrencies

By Katherine Baer, Ruud A. de Mooij, Shafik Hebous, Michael Keen

July 5, 2023

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Format: Chicago

Katherine Baer, Ruud A. de Mooij, Shafik Hebous, and Michael Keen. Taxing Cryptocurrencies, (USA: International Monetary Fund, 2023) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Blockchain and DLT, Capital gains tax, Currencies, Money, Taxes, Technology, Value-added tax, Virtual currencies

Keywords: B VAT, Bitcoin, Bitcoin transaction, Blockchain and DLT, Capital gains tax, Cryptocurrency, Currencies, Global, Income taxation, Intrinsic value, Sales taxation, Tax authorities, Tax compliance, Tax evasion, Value-added tax, Virtual assets, Virtual currencies

Publication Details

  • Pages:

    35

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2023/144

  • Stock No:

    WPIEA2023144

  • ISBN:

    9798400246586

  • ISSN:

    1018-5941

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