The G20 countries have called for the taxation of cryptocurrency, as well as its regulation to combat money laundering, Japanese news agency Jiji.com reported.
According to Jiji.com, the overall textual content of a record collectively delivered by means of G20 leaders requires “a taxation gadget for cross-border digital fee services and products.”
The article then states that under current laws, foreign companies that do “not have a factory or other base in Japan” cannot be taxed by the local government. The publication then quotes that the G20 leaders seek to “build a taxation system for cross-border electronic services.”
The member states, which gathered in Buenos Aires, Argentina, are reportedly at work on the system and “will consider the issue during 2019 when Japan will be the president of the summit.” A final version of regulations, after considering proposals from each member state, is reportedly expected to be in place by 2020.
Recently France’s finance minister Bruno Le Maire also referred to as at the G20 to have a public debate about cryptocurrencies at the summit.
Le Maire mentioned that leaders will,
“Have a dialogue all in combination at the query of Bitcoin (BTC) since there’s it appears that evidently chance of hypothesis. France must read about this with different G20 participants to look how we will be able to keep watch over Bitcoin.”
On the Japanese side, according to Jiji, the current international rules make it impossible to request tax from a foreign organization that does not have an office or any physical location in Japan. However, several international laws do not allow most countries to tax companies without physical bases in that specific country.
“We will seek solutions for the international taxation issue accompanying the digitization of the economy and will continue to collaborate,” the G20 stated in the declaration. While the leaders said that they are showing full cooperation towards creating a cross-border crypto tax system, they will also introduce measures to cut back on the tax avoidance of multinational corporations.
According to the Japanese news agency, while the UK and the EU are for the regulation side, the United States and China are cautious about developing an international taxation system for cryptocurrencies.
Jiji stated that they expect a tussle at next year’s G20 summit where Japan will be the leader, so the countries will likely to be forced to take a difficult step in this case.
Such bold moves should not be looked down as an onus. Bringing in such regulations streamlines this high technology to be slowly percolated into the mainstream.