The Organisation for Economic Cooperation and Development (OECD) has called for additional requirements to the current model for which cryptocurrency-focused transactions are reported to the appropriate tax authorities.
In a consultation paper published on Tuesday, the OECD argued that tax authorities around the world do not have the right visibility to monitor transactions involved in the crypto space going by the currently approved standards.
The subject of crypto taxation comes off as one of the most polarizing in the nascent digital assets ecosystem. While many countries have failed to legalize the engagement in cryptocurrencies, it has not deterred tax authorities to demand investors and traders in the space to pay what is due when the tax season comes calling.
Per the proposal demanding additional reporting standards on crypto transactions, the OECD is proposing a maximum term of 12 months to prepare licensed trading platforms to develop the capacity to comply with the new rules when or if eventually implemented.
The proposal is seeking the public to help comment on the scope of the requirements, on what digital assets, including Non-Fungible Tokens (NFTs) it is set to impart, and other key areas of consideration.
“Unlike traditional financial products, crypto-assets can be transferred and held without the intervention of traditional financial intermediaries and without any central administrator having full visibility on either the transactions carried out or crypto-asset holdings,” said a summary of the report. “Therefore, crypto-assets could be exploited to undermine existing international tax transparency initiatives.”
Many tax bodies, including the United States Internal Revenue Service (IRS), are well on their toes with respect to crypto tax reporting. As part of its measures to monitor crypto transactions aright, the regulator has in times past hired the services of private crypto tax contractors to help track down potential tax evaders.
The OECD proposal is open for comments up until April 29 with the organization slated to report on the amended reporting rules during the G20 Bali summit in October.
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