Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252328 
Year of Publication: 
2021
Series/Report no.: 
JRC Working Papers on Taxation and Structural Reforms No. 12/2021
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
Abstract: 
This paper sheds light on the scarce empirical evidence on cryptocurrency users and use types. Based on the only available empirical estimate, shared by Chainalysis, this paper simulates the revenue potential from taxing Bitcoin capital gains in the EU. Total estimated Bitcoin capital gains in the EU amount to 12.7 billion EUR in 2020, including 3.6 billion EUR of realized gains. Applying national tax rules on capital gains from shares to those from Bitcoin yields a simulated tax revenue of about 850 million EUR in 2020. This paper is the first to empirically assess the tax revenue potential of capital gains from Bitcoin in the EU. While most of the empirical cryptocurrency literature is based on time-series data, this paper relies on dis-aggregated country-level data. The findings show that revenue from taxing cryptocurrencies is nonnegligible and will be if the market of cryptocurrencies continues to grow.
Subjects: 
Capital gains taxation
cryptocurrencies
Bitcoin
JEL: 
G19
G23
H24
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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