In the current world we are facing the appearance of new technologies that presents a challenge to the already established system, one of them being cryptocurrencies. Its core characteristic is the decentralized nature and the possibility of process anonymous transactions. Nonetheless, those present a challenge for the current system since it complicates the taxation and regulation of this asset. We center our research in Colombia, and most specially how the lack of regulation can be affecting the tax collection and therefore the state budget of the country. The analysis, using Gretl software, consisted of finding a regression model employing the Ordinary Least Squares method which could model the dependent variable tax collection. One of the most important findings was that the Bitcoin holding seems to be not correlated with the model and therefore makes us believe that there is no tax regulation being enforced enough with this asset. For this reason, we recommend that the governmental bodies and tax authorities employ a specific plan when it comes to cryptocurrencies and taxing of similar assets.
Bitcoin, created in 2008, is the first successful cryptocurrency. Bitcoin involves an industry, in which, in addition to users, we have: a group of developers; miners; wallet providers; mixer providers; stock exchanges; and crypto banks. There are already countries whose tax policies accept bitcoins. This article is about this last aspect. The article will initially seek to define Bitcoin and its industry, which are sources of much controversy. It will then discuss whether it is advantageous for the Brazilian taxpayer to honor its fiscal commitments with bitcoins, and under what circumstances would it be advantageous for public management to deal with bitcoins in its fiscal policy. In Brazil, the city of Rio de Janeiro plans to accept bitcoins in payment of taxes in 2023 and Brazil is preparing to improve its institutional framework for dealing with cryptocurrencies through Law 14,478/2022.
The new European regulatory framework for crypto-assets contains strict reporting requirements for EU-based crypto service providers, which will give tax authorities and law enforcement agencies better insights into a significant segment of the cryptoasset space. The article first outlines how this will inevitably lead to the creation of a parallel crypto-asset market focused on offline wallets and peer-to-peer services outside the supervision of EU and national tax authorities. The article then highlights the important role that the so-called Central Bank Digital Currencies (CBDCs) will play in this environment. The differences between CBDCs and crypto-assets are examined from a tax assessment perspective in order to show that true anonymity is considerably less of an issue with (price stable) CBDCs than with (volatile) crypto-assets. The authors argue that a truly anonymous digital euro wallet for small transactions on the consumer side could not only allow the effective monitoring of businesses, but would actually increase tax compliance. If consumers have access to an anonymous cash-equivalent digital means of payment, they will be less likely to use cash or virtual currency. This in turn will cause a significant increase in available transaction data, while simultaneously granting a much better protection of taxpayers’ rights to privacy in the EU. cryptocurrency, crypto-asset, AML, taxation, CBDC, digital euro, privacy, taxpayer rights, tax assessment, wallet, reporting standards
This article explores the complexities of calculating tax liability for participants in decentralized finance (DeFi) transactions. It examines the unique characteristics of DeFi, including anonymity, automation, and rapid asset movement, that complicate traditional tax reporting. This article analyzes current regulatory guidance and identifies gaps in existing tax frameworks. This article also considers strategies for ensuring compliance while accounting for the innovative nature of DeFi platforms. This article concludes that a nuanced, adaptable approach is necessary to fairly and accurately assess tax obligations in the decentralized financial ecosystem.
While most influential in art markets, the non-fungible token (NFT) phenomenon also has serious ramifications for museums and other cultural institutions. This chapter explores these applications to core non-profit missions and activities, including audience development, fundraising, earned-income generation, acquisitions, and institutions’ relationships with their communities. Any initiative involving NFTs at a museum is also an exercise in strategic planning. We develop a novel conceptual framework around mapping institutions’ “financial” and “philosophical” priorities to guide strategic planning around NFTs. We present this framework through five case studies that range from existing museum projects around revenue generation, conservation, and endowment to two hypothetical scenarios around deaccessioning, restitution, and institutions’ relationships with their audiences. Cultural institutions apart from museums may also find the framework valuable and worth incorporating into their strategic planning processes as it can be tailored to an organization’s individual priorities, artistic missions, and financial needs.
Lin William Cong, Wayne R. Landsman, Edward L. Maydew, Daniel Rabetti
We describe the landscape of taxation in the crypto markets, especially that concerning U.S. taxpayers, and examine how recent increases in tax scrutiny have led to changes in trading behavior by crypto traders. We predict under a simple theoretical framework and then empirically document that increased tax scrutiny leads crypto investors to utilize legal tax planning with taxloss harvesting as an alternative to non-compliance. In particular, domestic traders increase taxloss harvesting following the increase in tax scrutiny, and U.S. exchanges exhibit a significantly greater amount of wash trading. Additional findings suggest that broad-based and targeted changes in tax scrutiny can differentially affect crypto traders' preference for U.S.-based exchanges. We also discuss other gray areas for tax regulation related to new crypto assets such as Non-Fungible Tokens and Decentralized Finance protocols that further highlight the importance of coordinating tax policy and other regulations.
Increased administrative discretion for human resource and financial management is commonly seen as a key component of efficient service delivery. However, the directive attitude of some central government officials in Tanzania undermines the administrative discretion of local councils to implement approved local plans and budgets. Using a case study of two local councils in Tanzania, this study investigated the influence of decentralization on administrative discretion and decision space. The findings show that local councils have little administrative discretion and decision space over human resources, financial management, and service delivery. The study calls for a comprehensive review of decentralization policies and local government legislation to address the allocation of powers and decision space of the institutional capacity of local councils to provide local services. Their roles and responsibilities should also be specified in the national constitution to safeguard them from the encroaching “directive culture” of central government officials.
Background: The concept of devolution has always presented significant controversy in African unitary states. It is often viewed with inherent suspicion and skepticism based on the lack of mutual trust between the people and the government. While proponents see it as a form of empowerment, resistant groups in society view the decentralization of government powers and responsibilities as a gateway to success. Despite the devolution agenda being a major component of local governance in the Zimbabwean Constitution of 2013, it would not be practically implemented until the new dispensation that rose into power in 2018. However, the coming in of the COVID-19 pandemic has significantly marred the take-off of devolution implementation in Zimbabwe. Whilst COVID-19 cases continue to escalate on the globe, African countries continue to battle not only with the second wave of the pandemic but also with the new COVID-19 variants. Already fragile economies of these countries, the governments were forced to prioritize the national budgets in response to the pandemic; consequently, other social and developmental issues were left behind. Objective: This study discusses the contemporary status of devolution in Zimbabwe to ascertain the extent of implementation; provide supportive legislation for devolution structures through recommendations; analyze devolution disbursements from 2019 before COVID-19 to date; assess the local authorities’ initial requests versus the disbursements in 2019 and 2020. Method: The researcher carried out a desk review and followed the principles of case study design by analyzing financial statements, reports and data coming in from the Councils and relevant Government ministries. The meaning was also derived by critically reviewing, organizing and interpreting related information from books and articles published in newspapers and journals. Result: Despite Section 264(1) of the Constitution providing for devolution of power to the three tiers of the Government, there is no supporting legislature in place as yet to actualize this key element. The Government Budgetary Allocation of 5% is not meeting local authority demands. Conclusion: The onset of the COVID-19 pandemic in late 2019 reduced the pace of the devolution process because the funds were channeled to fight against the virus. If properly practiced, devolution may be one of the solutions to the development of the Zimbabwean economy since the devolution program is largely founded on the principle of empowering provincial government councils and Local Authorities to spearhead economic and social development projects in their areas by leveraging on local resources. It may also solve issues of corruption in many local councils in Zimbabwe by improving accountability mechanisms, especially where sub governments are permitted to progressively compete with each other to establish innovative ways of delivering public services efficiently and inexpensively. Implications: The findings imply that the Government policies can affect the social and economic well-being of citizens, however, the COVID-19 pandemic has far outweighing impacts. Secondly, the coronavirus outbreak has proved how much the Government of Zimbabwe is ill-prepared to deal with a pandemic of this dimension. Policymakers should ensure that finances are set in the national budget for unseen events so as not to derail other Government projects. Originality: This paper is original and not sent anywhere for publication.
Tax is assessed and paid in the legal tender in which the transaction was conducted. A legal tender is a fiat currency centrally issued by the government through its Central Bank and is legally declared and designated as money to meet all kinds financial obligations including payment of taxes and debts within the boundary of a particular country. However, advancements in technology led to the emergence of virtual medium of payment such as ‘cryptocurrency’ which do not enjoy legal tender status like fiat currency. Over the past decade, there has been an increased number of transactions in Nigeria where cryptocurrency was the means of payment. This raises the question as to how such transactions will be assessed to tax bearing in mind that tax can only be assessed and paid in the currency in which the transaction was conducted. In addition, the virtual nature of cryptocurrency creates opportunities for tax avoidance thereby constituting a serious tax challenge for a developing country such as Nigeria. It therefore becomes necessary to address the taxation of cryptocurrency transactions to prevent tax avoidance that can arise therefrom. This objective of this article is toexamine the nature and the legal status of cryptocurrency. The article will also examine the tax treatment of cryptocurrency in some selected tax jurisdictions as well as the tax challenges posed by cryptocurrency transactions.
The objective in this study were to study the state of the art of Non-government-based cryptocurrency public policy in Thailand, to study the state of the art of Non-government-based cryptocurrency public policy in Argentina, to compare non-government-based cryptocurrency public policy between Thailand and Argentina, and to discuss implications for both Thailand and Argentina. Documentary research was employed in this study. The findings showed that Thailand and Argentina used a set of policy instruments and blockchain as a financial innovation in order to promote their political equilibriums. The comparison of non-government-based cryptocurrency public policy between Thailand and Argentina was conducted in four issues – scope, policy instrument, distribution, and restraints and innovation. In addition, both countries used both active and passive measures in order to maintain the stability of their political systems.
DAC8 could be a quick fix to cryptocurrency tax evasion. In an ecosystem where pseudo-anonymity is the rule, however, taxpayers are difficult to identify. Unless information can be obtained that links the virtual and real identities of taxpayers, taxation is impossible and even the best thought-out tax rules will be limited in scope. This article, after establishing the cryptocurrency playing field, addresses the limitations of cryptocurrency tax compliance, with an emphasis on the European Union.
Purpose The purpose of this paper is to explore the use of blockchain technology in contested markets. The authors specifically consider the development and utilization of this accounting system as a device that might democratize contested markets for vulnerable populations, supporting contested entrepreneurs while “cooling” the moral contestation to the market. Design/methodology/approach This study analyzes the relationship between vulnerable populations and contested market activities, the inclusive development and potential trust created by a blockchain accounting information system and how this interaction potentially creates support for economic and social systems. Findings This paper demonstrates that, in an era of decreased trust especially as it relates to a digital, globalized marketplace, blockchain has the potential to create democracies of access, trust and agency. This system overcomes many of the deficiencies associated with transparency and accountability and connects market participants with society, strengthening its potential to bridge two opposing vulnerable population viewpoints necessary for possible contested market development. Research limitations/implications The authors contribute to a deeper understanding of the role of emerging technologies in the interconnectedness between vulnerable populations in a contested market. Recognizing that blockchain is an imperfect version of its ideal intention, the authors also discuss the limitations of the system with respect to corruption, collusion and potential issues of adoption, and how this reduces the influence of blockchain as a “cooling” device within contested markets. Practical implications The authors provide an illustrative example whereby an entire industry might be persuaded from avoidance to promotion of new traceability devices and supported in the development of an accessible market. Social implications Global government's economic support for social systems continues to experience significant declines. With ever-degrading healthcare, infrastructure, public education, childcare, etc., new sources of economic influx are often desired. One potential source of additional funds is from the tax revenues derived from contested market transactions, those stigmatized industries often operating illegally. With substantial public distrust, blockchain potentially provides such industries with democratization and the trust necessary to transition the industry into a legal environment, with tax revenues benefiting various social systems. Originality/value This study goes beyond the preliminary discussions of the benefits and consequences of blockchain. Instead, the authors focus on the use of blockchain within contested markets and its ability to influence vulnerable populations. The authors also consider the use of blockchain-based accounting information systems to provide a holistic and more democratic platform from a regulatory, market participant and societal standpoint.
Blockchain is comprised of a scattered database of blocks containing information which is encrypted with special algorithms called hash, that enable data monitoring. The digitization of payment systems as well as goods and services has led to the development of cryptocurrencies such as Bitcoin. However, although it was originally created for bitcoin trading, the potential of blockchain extends beyond cryptocurrencies and is still evolving. The aim of this study is to investigate the use of blockchain technology in taxation. In the study, the use of blockchain technology in taxation was examined and analyzed for selected countries and Turkey. Legal and administrative studies continue to be carried out in countries around the world to reduce the administrative burden in tax systems, allow tax collection at low costs and reduce tax deficits. As a result, blockchain technology will lead to change and transformation of the world tax regimes due to its transparency.
O presente trabalho tem como objetivo demonstrar a origem e a formação de criptomoedas, compreendendo a natureza material dessa tecnologia em detalhes, será possível categorizá-la em um fator de incidência tributária adequado, pois apenas compreendendo o objeto da tributação, em sua essência, será possível classificá-lo com menores riscos de incorrer em erro, aplicando o imposto mais adequado ao caso específico. Consequentemente, serão apresentadas a criptomoeda e suas possíveis classificações na ordem jurídica, a fim de entendê-la como um bem ou como um ativo de mercado, ou seja, uma própria moeda. Essa classificação é fundamental para que seja possível determinar como a incidência tributária será dada na moeda virtual e, é claro, permitir a aplicação da regra da matriz tributária a ela. Além disso, nesta pesquisa será trabalhada, em um primeiro momento, a constituição existencial da criptomoeda, além de uma explicação tributária sobre os fatores de incidência que podem ser aplicados a essa tecnologia, buscando entender a essência tanto no amplo escopo jurídico e na própria tributação. Dessa forma, será necessário analisar a moeda virtual de maneira semelhante a outros ativos que possuem operações fechadas, bem como verificar o entendimento internacional sobre o assunto, uma vez que essa tecnologia é definitivamente um ativo internacional.
The coronavirus pandemic (COVID-19) threatens people’s health. During the COVID-19 outbreak, people are encouraged to wear masks to reduce the spread of the virus. With the strong demand for masks, it has come a boom in counterfeit production. Combating counterfeit masks is vital and urgent to reduce the risks for public health. Motivated by the actual practices during the COVID-19, we examine how quality inspection and blockchain adoption help combat counterfeit masks. We find that quality inspection may not be always effective, as the government will tolerate the presence of counterfeit masks if the presence of the counterfeits is not significant. Comparing quality inspection with blockchain adoption, when the spread of COVID-19 is mild, authentic mask sellers may be encouraged to use the blockchain technology, which can increase their profits and reduce the social health risk. Furthermore, we extend our model to investigate the impacts of endogenous quality. Both quality inspection and blockchain adoption can induce low-quality mask sellers to enhance thequality level. When the number of counterfeit masks is increasing, encouraging the high-quality mask sellers to adopt the blockchain technology is effective to reduce social health risk when the spread of the coronavirus is rapid.
ABSTRACT To protect the privacy and other civil liberties of citizens, federal courts place limits on the power and actions of government. These limits create a need for balance between the IRS' mission of tax law enforcement and taxpayers' privacy rights. A much-watched contemporary lower court case intersecting cryptocurrencies, summons power, and taxpayer privacy is Coinbase v. U.S. There, the IRS sought to summons massive amounts of customer information from Coinbase, a cryptocurrency exchange platform. This article examines the history of the IRS summons power and argues that the Coinbase court correctly extended a wealth of summons enforcement case law by weighing the protection of taxpayer privacy with the tax compliance mission of the IRS. By allowing the IRS summons to stand, but limiting and defining the scope of relevant records allowed to be examined, the Coinbase court correctly balanced IRS tax enforcement with taxpayer data privacy.
ABSTRACT: The treatment of virtual currencies when it comes to income tax differs as much as the definitions of virtual currencies from country to country. It depends on this definition whether the existing laws corresponding to income tax can also include virtual currencies. Most commonly, virtual currencies fall under a certain category of income and thus are taxed accordingly. Many states have also published clarifying documents on how virtual currencies fit for tax purposes and how the existing legislative framework applies to them. Very few states consider cryptocurrencies as another type of currency, complementary to the usual one, whether we are talking about domestic or foreign markets, thus including them for tax purposes. KEY WORDS: Tax system, Cryptocurrencies, legislation, regulation