OECD Opens Call for Comments on the Tax Transparency Framework for Cryptocurrencies

According to the OECD, the cryptocurrency market presents “significant risks” to tax transparency, claiming that without additional safeguards, any gains will eventually evaporate.

The Organisation for Economic Co-operation and Development (OECD) has proposed additional requirements for crypto transactions and user identification reporting, aimed at increasing the transparency of tax authorities around the world.

In a public consultation paper released on Tuesday, the OECD opened for public comment on a proposal that would require cryptocurrency service providers to better identify users and report certain transactions. According to the group, tax authorities do not have “sufficient visibility” into transactions involving crypto assets under current reporting requirements. According to the OECD, there are “significant risks” surrounding tax transparency, claiming that without additional safeguards, any gains will ultimately be lost.

The proposal recommends that individuals and businesses already engaged in cryptocurrency services — including exchanges, retail trading and transferring tokens — comply with reporting requirements within 12 months from the date the rules go into effect. The public was asked to evaluate the crypto assets covered in the proposal — including NFTs — as well as tax reporting rules and “due diligence” procedures related to collecting information on crypto traders in hot and cold wallets.

“Unlike traditional financial products, crypto-assets can be transferred and held without the intervention of traditional financial intermediaries, and no central authority can have complete knowledge of the transactions conducted or the holdings of crypto-assets,” the report said. Abstract writes. “As such, cryptoassets can be exploited to undermine existing international tax transparency initiatives.”

“Today, the OECD released a public consultation paper on a new global tax transparency framework to mandate reporting and exchange of information on cryptoassets.”

— Amy Lee Rosen (@amyleerosen) March 22, 2022

The proposal will be available for public comment until April 29, with a consultation meeting expected at the end of May. The OECD said it aimed to report on the revised reporting rules during the Group of 20 summit in Bali in October.

Tax season for U.S. residents is upon us, and many need to file their returns by April 18. National tax authorities often have different reporting requirements for holding or exchanging crypto assets, and many U.S.-based centralized exchanges send documents to the Internal Revenue Service reflecting the previous year’s transactions. Taxpayers typically report the exchange of tokens or cryptocurrencies into fiat currency as capital gains or losses.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/oecd-opens-call-for-comments-on-the-tax-transparency-framework-for-cryptocurrencies/
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