Need to update tax systems for crypto assets: IMF paper

Tax systems need updating to cope with crypto assets, whose anonymity and decentralised nature poses challenges — not least for the value added tax, says an IMF paper. It also cautions that crypto poses significant tax problems and they could get worse.

“Given the complexity of the fundamental challenges posed by pseudonymity, the rapidity of innovation, the vast information gaps, and the uncertainties ahead, the tide has not yet turned in the battle to incorporate crypto properly into the wider tax system. Some of the elements needed for doing so — such as clarity in their classification for tax purposes — are clear,”