Tom Emmer: The U.S. Can Still Lead the World in Amenable Crypto Taxation
United States Congressman, Tom Emmer (MN-06), has commissioned a research report from the Law Library of Congress on February 3, 2021. The report details how cryptocurrency is taxed in various jurisdictions. Rep. Emmer says he thinks the U.S. still has a chance to lead the rest of the world in terms of the formulation of clear guidelines for crypto tax reporting.
Crypto Taxation Still a Global Issue
A research report prepared by foreign law specialists of the Law Library of Congress and commissioned by Congressman Tom Emmer has revealed that a good number of countries across the globe are yet to put in place suitable taxation guidelines for digital assets.
The report which is entitled “Taxation of Cryptocurrency Block Rewards in Selected Jurisdictions,” carefully surveys 31 nations, including Argentina, Canada, Germany, Malta and others, in terms of how crypto gains gotten from mining, staking, airdrops, hard forks, and DeFi-related activities are taxed.
The report notes that while most jurisdictions have put in place taxation laws for proof-of-work based cryptoassets like bitcoin, there is little or no taxation guidance for proof-of-stake based tokens obtained via staking.
“The report shows that while tax authorities of a number of countries have published guidance on the taxation of mined tokens such as Bitcoin and other “proo-of-work” cryptocurrencies, only a few specifically address the taxation of tokens received through staking,” the report states.
Emmer Urges the U.S. to Do More
The report further notes that cryptocurrencies are treated differently in various jurisdictions, with some countries having stricter classification guidelines than others.
“Cryptocurrency is variously treated by the surveyed countries as an investment property (Denmark, Norway, Finland), a financial instrument (Germany), an intangible asset or property (Luxembourg, Switzerland), a financial asset (Venezuela), a commodity (Canada), an investment capital (Sweden),” etc.
What’s more, the report has revealed that authorities in Australia, Finland, New Zealand, Norway and Switzerland have different tax treatments for tokens obtained via staking. In Australia, small-scale mining by individuals does not need to be reported as income and taxes are only payable when the miner sells off the cryptos. The same rule applies to tokens gotten through staking activities.
In Finland, mined coins are treated as “income from a hobby,” while digital assets received via staking attract capital gains tax, “as the taxman considers the staked asset as value created on top of cryptocurrencies already held.”
Commenting on the matter, Congressman Tom Emmer said:
“With the help of the Law Library of Congress, we have a comprehensive overview of the tax treatment and implications in 31 countries around the globe. It is clear that the United States can still be a leader in establishing principles for proper taxation of digital assets.”
Crypto taxation remains a major issue for tax agencies around the globe, as most tax agencies are still finding it difficult to get hodlers to pay the correct taxes on their crypto transactions.