G20 Advisory Board Feels Cryptocurrency is a Threat to Global Economic ActivityDecember 2, 2018
The G20 conference, which is happening at this moment in Buenos Aires, has produced a decision which will be interesting to the cryptocurrency world.
The attendant politicians have signed a document which indicates their intention to begin working on a solution to the issue of cryptocurrency tax, and that they will collaborate to this end
The kind of cryptocurrency taxes imposed on businesses differs from one country to another. The tax treatment is not the same across the globe. However, the G20 meet has discussed the international cryptocurrency tax issue. At present, it is illegal for any government to be taxing a foreign company that does not have a brick and motor presence in the taxing country.
Previously in June, a coalition was formed under the name and style of Joint Chiefs of Global Tax Enforcement (J5) to fight the cryptocurrency tax crime. The Enforcement team was focused on tackling tax evasion.
The J5 was formed to tackle offshore structures and financial instruments. Some of these foreign companies committed tax crimes by favoring money laundering. Both tax evasion and money laundering is a threat to the economic well-being of the whole country.
Organized criminals and tax evaders were exploiting the cryptocurrency system and the vulnerabilities. The leading tax and financial experts from across the member states joined together in J5 to develop tactical plans and as well to identify newer opportunities to deal with international tax crimes.
Cryptocurrency Taxation guidelines were introduced in the US in 2014, and it decided to treat Bitcoin as a property, and a team of investigators was cracking down on those exchanges who were using cryptocurrency to launder money and to evade tax.
The ongoing G20 has discussed the construction of an international system that will tax any kind of cross-border payments made. This has been discussed because several offshore companies are exploiting the rule that companies without physical presence cannot be taxed. They are using this rule to avoid tax.
The final version to address this issue will be ready by 2020. All the G20 countries will be working on similar proposals, and they will be discussing it at the next meeting which is to be held in Japan. Of note, countries like France and Japan were calling for a similar discussion.
The advisory board of G20 reported that cryptocurrency by itself is a threat to the economic activity of the world. The confidence in the authority of the financial institutions is coming down after the coming of the cryptocurrency.