Crypto taxes will be tightened

WLThere are some myths in cryptocurrency investments. One is that these are completely anonymous and therefore untraceable. This goes hand in hand with the assumption that the pursuit of tax liability is not far off. “In the past, the tax authorities had some technical catching up. This is why the demand for tax payment in the crypto area has not been followed as closely as elsewhere. The Austrian company specializes in tax document generation and money laundering software for blockchain applications and has Private and institutional clients in six countries.

But anyone who thinks that the tax authorities are still far behind is likely to be mistaken. For the third quarter, the European Union Commission announced the expansion of the automatic exchange of information for crypto systems and electronic money as part of the Action Plan for Fair and Equitable Taxation. This could be implemented by the beginning of 2023 under the acronym DAC8 (the eighth edition of the “Directive on Administrative Cooperation”).

It’s also about the past

It’s billions of dollars in taxes. According to an extrapolation from Blockpit, the blockchain hub at Frankfurt School and law firm Dr. Andres to at least €1.28 billion in tax year 2020. With DAC8, the obligation to provide information to all financial service providers operating in the European Union will be extended. The exchange must take place down to the transaction level. “You will notice the activities at the latest when making deposits and withdrawals,” says Wimmer.

Internationally, tax tracking has been tightened. The US first requested tax information from cryptocurrency exchanges in 2018, and Europe will follow suit. Wimer says expanding registration requirements for financial service providers was the first step. In Germany in particular, investors should be careful. The Federal Ministry of Finance is currently working on a step-by-step guide for taxing income from mining and mining, i.e. from producing coins and confirming transactions.