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Taxing Cryptocurrencies

Author

Listed:
  • Ms. Katherine Baer
  • Ruud A. de Mooij
  • Mr. Shafik Hebous
  • Mr. Michael Keen

Abstract

Policymakers are struggling to accommodate cryptocurrencies within tax systems not designed to handle them; this paper reviews the issues that arise. The greatest challenges are for implementation: crypto’s quasi-anonymity is an inherent obstacle to third-party reporting. Design problems arise from cryptocurrencies’ dual nature as investment assets and means of payment: more straightforward is a compelling case for corrective taxation of carbon-intensive mining. Ownership is highly concentrated at the top, but many crypto investors have only moderate incomes. The capital gains tax revenue at stake worldwide may be in the tens of billions of dollars, but the more profound risks may ultimately be for VAT/sales taxes.

Suggested Citation

  • Ms. Katherine Baer & Ruud A. de Mooij & Mr. Shafik Hebous & Mr. Michael Keen, 2023. "Taxing Cryptocurrencies," IMF Working Papers 2023/144, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2023/144
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    Cited by:

    1. Álvaro Hernández Sánchez & Beatriz María Sastre-Hernández & Javier Jorge-Vazquez & Sergio Luis Náñez Alonso, 2024. "Cryptocurrencies, Tax Ignorance and Tax Noncompliance in Direct Taxation: Spanish Empirical Evidence," Economies, MDPI, vol. 12(3), pages 1-25, March.
    2. Jabbour, George M. & Mansour-Ichrakieh, Layal, 2025. "“Dollarization vs. bitcoinization in Türkiye: Which is more dangerous for the financial market?”," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 100(C).
    3. Gunay, Samet & Altınkeski, Buket Kırcı & Ismail Çevik, Emrah & Goodell, John W., 2023. "Quantifying systemic risk in the cryptocurrency market: A sectoral analysis," Finance Research Letters, Elsevier, vol. 58(PC).
    4. Hebous, Shafik & Vernon-Lin, Nate, 2024. "Cryptocarbon: How much is the corrective tax?," Energy Economics, Elsevier, vol. 138(C).
    5. Shafique Ur Rehman & Touqeer Ahmad & Wu Dash Desheng & Amirhossein Karamoozian, 2024. "Analyzing selected cryptocurrencies spillover effects on global financial indices: Comparing risk measures using conventional and eGARCH-EVT-Copula approaches," Papers 2407.15766, arXiv.org.
    6. Arindam Misra, 2024. "Tax Policy Handbook for Crypto Assets," Papers 2403.15074, arXiv.org, revised Oct 2024.

    More about this item

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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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