The OECD Prepares a Model to Tax Bitcoin

The Organization for Economic Cooperation and Development should propose in 2021 a tax model for investments related to Bitcoin.

OECD general secretary report was presented for the Ministers of Finance and the Presidents of the Central Banks of the G-20. The OECD recently published the report. It shows concern about the growth of the cryptocurrency market. The report affirms that crypto-assets and virtual currencies within them are developing rapidly. Overall, market capitalization for virtual currencies reached $354 billion in September 2020.

The OECD intends to present a new form of taxation that helps countries create fees for transactions and investments involving Bitcoin.

Tax in Bitcoin

Forecasts expect the cryptocurrency market will have a universal taxation model shortly. It will serve as a guide for the preparation of local taxes. Thus, the countries that are part of the G20 can join the tax proposal developed by the OECD.

Before its presentation in 2021, the organization requested the countries part of the G-20, the authorities linked to central banks worldwide, to form the taxation of cryptocurrencies.

According to the report, there are concerns about the impact of the cryptocurrency market on the global financial system. And also the approach of a proposal to create a “Bitcoin tax.”

The governors asked international organizations to analyze the risks that arise in various policy areas. Thus, including taxation, in their communications in March and July 2018.

Regulation for Cryptocurrencies

In addition to mentioning the creation of a tax model for the sector, the OECD report also talks about the Bitcoin market regulation. As in most countries, no legislation has approval explicitly for cryptocurrencies.

Thus, for the OECD, initiatives related to the regulation of cryptocurrencies are still underway worldwide. On the other hand, the organization has also raised its concern about criminal practices. These include practices like tax evasion and money laundering.

Regulators are still in the early stages of considering virtual currencies.

The October 2020 report presented by the OECD provides information on how COVID-19 impacted the world economy during the year and discussed creating a tax for Bitcoin.

Although forecasts expect the presentation in 2021, the fiscal model of Bitcoin developed by the OECD has not been formally presented by the organization yet. Therefore, it is not possible to measure how the cryptocurrency market could be taxed through the intergovernmental organization’s guidelines.