Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272016 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10372
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Policymakers are struggling to accommodate cryptocurrencies within tax systems not designed to handle them; this paper reviews the issues that arise. The greatest challenges are for implementation: crypto's quasi-anonymity is an inherent obstacle to third-party reporting. Design problems arise from crytocurrencies' dual nature as investment assets and means of payment: more straightforward is a compelling case for corrective taxation of carbon-intensive mining. Ownership is highly concentrated at the top, but many crypto investors have only moderate incomes. The capital gains tax revenue at stake worldwide may be in the tens of billions of dollars, but the more profound risks may ultimately be for VAT/sales taxes.
Subjects: 
cryptocurrency
virtual assets
tax evasion
tax compliance
Bitcoin
JEL: 
E62
H25
H32
Document Type: 
Working Paper
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