G20 Leaders Discuss International Crypto Tax
This year’s Summit, held in Buenos Aires, Argentina, was different from the others, in that the member countries discussed international taxes on cryptocurrencies and the regulation of the industry as whole to fight money laundering.
Creation of International Crypto Taxation
The member countries’ representatives have signed a document which calls for a tax system being put in place for “cross-border electronic payment services”. This is indicative of their decision to start working on a resolution to the challenge of international taxation of cryptocurrencies.
This document also states that all member countries will work towards achieving this goal.
Currently it is illegal for a country to levy taxes on a foreign company that does not have a physical presence on its territory. However, there is also evidence that this rule is being exploited to avoid paying taxes by the use of cryptocurrencies.
Money laundering is another issue that a growing concern, since it is easier to launder money using cryptocurrencies. Therefore, this too is on the agenda for the leaders at this year’s G20 Summit.
According to this new document, all the G20 countries will work on their individual proposals, which will then be discussed at the 2019 G20 Summit to be held in Japan. Per the agreement, the G20 group will have a final version of this plan ready by 2020.
Growing Demand for International Laws for Cryptos
Despite the fact that this is first time that the G20 leaders officially discussed the need for greater international regulations cryptocurrencies, a number of countries, such as France and Japan, have been demanding this step be taken for some time now.
In October, the Group’s advisory board had stated that cryptocurrencies were developing into a threat that could destabilize the world’s economy. The advisory board is known as the Financial Stability Board, and it said that institutionalizing cryptocurrencies would be detrimental to the world economy since it could lead to the erosion of confidence in the authority of the world’s traditional financial institutions.
There are also industry leaders within the crypto space that have also been calling for some form of institutionalization of cryptocurrencies at an international level. In fact, the Chief Executive Officer of Circle, Bruno le Maire stated in July that there needed to be normalization of cryptocurrencies at the G20 level.