The Organization for Economic Cooperation and Development, or OECD, has proposed new rules for reporting crypto transactions and identifying users in order to make it easier for tax authorities around the world to track them.
Proposals that would make crypto service providers better identify users and report on certain transactions were made public on Tuesday. The OECD wants to hear what people think about them.
The group said that under current reporting rules, tax authorities don’t have “enough visibility” into transactions with crypto assets.
According to the OECD, the crypto market posed a “significant risk” when it came to tax transparency. They said that without more safeguards, any gains would be lost.
The proposal said that people and businesses who already use crypto services, such as exchanges, retail transactions, and transferring tokens, should be able to meet the reporting requirements for 12 months after the rules come into effect.
Members of the public were asked to give their thoughts on which crypto assets would be covered by the proposal, as well as on tax reporting rules and “due diligence” procedures for collecting information from people who use crypto wallets for both hot and cold wallets, as well as on how to do this.
People can move crypto-assets without the help of traditional financial institutions, and there is no central administrator who can see all of the transactions that have been made or how many crypto-assets people own.
Crypto-assets, on the other hand, could be used to undermine existing international tax transparency initiatives.
Today the OECD released a public consultation document concerning a new global tax transparency framework to provide for the reporting and exchange of information with respect to crypto-assets. https://t.co/1qKFyXWOQb
— Amy Lee Rosen (@amyleerosen) March 22, 2022
After April 29, people can comment on the proposal. A meeting is expected to be held at the end of May.
There will be a report on the new reporting rules at the G20 meeting in Bali in October.
It’s tax time in the United States, and many people have to send in their returns by April 18.
Countries’ tax authorities often have different reporting requirements for HODLing or exchanging crypto assets. Many U.S.-based centralized exchanges send the Internal Revenue Service paperwork that shows how much money was exchanged or HODLed in the previous year.
Taxpayers often report when they change tokens or crypto into money as capital gains or losses.