The Dawn of Crypto Tax Standards
The world of cryptocurrency is a bit like the Wild West—exciting, unpredictable, and filled with lawmen dressed up as regulators trying to tame the unruly. Pascal Saint-Amans, the head honcho of the OECD’s Centre for Tax Policy and Administration, has proclaimed that the organization will roll out a common reporting standard (CRS) for crypto assets in the not-so-distant future, specifically aiming for 2021. This move is aimed at mirroring existing mechanisms developed to tackle tax evasion for more traditional tax matters.
Why the Rush for a Common Standard?
Amans highlighted a growing urgency among member countries to harmonize tax regulations surrounding cryptocurrencies. With many nations recognizing that digital assets aren’t going away—much like that one uncle who overstays their holiday visit—there’s a burgeoning appetite to establish clear guidelines. “The timeline to deliver is probably ’21, sometime in ’21, because there is an appetite by all countries now,” he remarked. If the cousin of tax evasion is chaos, the OECD aims to play the role of the family mediator.
Europe Joins the Fray
Not far behind in the regulatory race, the European Commission has also jumped into the pool, proposing amendments to its tax evasion laws concerning crypto assets. With plans underway to collect public feedback until December 21, they are setting the stage for the introduction of new laws expected in Q3 of 2021. However, while Europe is choosing its new laws, Amans believes the OECD will beat them to the punch. This situation could lead to an interesting dynamic where two governing bodies attempt to set rules in a regulatory arena.
A Potential Regulatory Tango
The chance of the OECD and Europe dancing to different tunes is not far-fetched. The risk of missteps is real, and Amans warned that differing policy positions could lead to confusion among the OECD’s European members. It’s like showing up to a party dressed in evening wear while the rest are in casual shorts and flip-flops.
“The specific situation of the EU and its member states needs to be taken into account,” acknowledged a spokesperson from the European Commission.
What Lies Ahead?
One reassuring factor is Amans’ belief that any OECD proposal would complement existing EU regulations despite the potential for tension. And with the European Commission actively seeking to “avoid overlaps or inconsistencies to the extent possible,” it appears there’s hope for a cohesive approach toward crypto regulation. As we look ahead to 2021, it’s clear that the road to regulating cryptocurrencies is paved with both opportunities and hurdles. Will they find common ground, or will it be a classic case of regulatory footsie? Only time—and perhaps some well-placed lobbyists—will tell.
