In brief
Blockchain’s interface with traditional institutions and financial systems provides revenue authorities with a digital trail, and with the growing risk of tax evasion and fraud in crypto-investments, authorities are incentivized to pursue recalcitrant taxpayers.
In depth
Tax and blockchain are niche, technical fields, and solving the puzzles encountered where these two complex systems interact can be daunting, even for the initiated. The ever-evolving spectrum of use cases for blockchain technology and investment types has generated an equivalent number of tax compliance permutations.
Tax compliance
Tax compliance for crypto-investments incorporates the standard considerations, viz correctly determining the amount of tax payable, compliance with the applicable disclosure requirements for the tax payable to be confirmed by a revenue authority, and finally, timely payment of the relevant amount of tax.
Source: Baker McKenzie
