G20 Leaders Agree to Introduce International Cryptocurrency Tax

Over the last weekend Dec 1-2, G20 global leaders gathered at Buenos Aires, Argentina for this year’s last summit conference. The leaders agreed upon one of the most awaited issues of introducing a common cryptocurrency tax for cross-border international payments.

The G20 leaders have signed a document which indicates that the member nations will soon collaborate to start working on the international crypto tax. On Sunday, Japanese news outlet JIJI reported that the taxation system for crypto will be developed considering the industry as a huge IT company.

The new taxation system involving international payments might also see the tweaking of existing rules. Currently, most of the countries cannot tax foreign companies which doesn’t have physical presence there. However, several companies are using this rule to their benefit by transacting through crypto. JIJI reports that the taxation system will also plug these loop holes by cutting down on tax avoidance by multinational corporations.

“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.

Furthermore, a report from Saudi Gazette mentions that in addition to the taxation system, the G20 countries have also agreed to introduce necessary regulatory measures to combat issues of terror-financing and money-laundering. Moreover, these regulatory measures shall be introduced in line with the Financial Action Task Force (FATF).

Section 25 of the declaration reads: “We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards, and we will consider other responses as needed.”

During the next G20 summit in June 2019, the member nations will review the first report. By its next year i.e. 2020 we can expect the taxation system to come into practice. European nations and the United Kingdom have shown interest in introducing international regulatory measures and taxation rules, while the U.S. and China remain skeptical of it.

The International Monetary Fund (IMF) has stressed the need of global cooperation for crypto regulations. Speaking at several events this year, IMF chief Christine Lagarde that cryptocurrencies are inevitable and thus we cannot have a neglecting eye. However, at the same time she said that it is necessary to have proper regulatory measures to ensure investors’ protection and prevent illicit activities.