During the G20 summit in Buenos Aires, Argentina, a declaration was passed to create an international taxation system for cryptocurrencies, according to the Japanese news outlet Jiji.com.
International crypto taxation while cutting back on money laundering
According to Jiji, the G20 leaders seek to develop the taxation system for crypto with a “huge IT company” in mind. The G20 will issue a report during 2019 when Japan will have the presidency over the summit, finalizing the report by 2020. In addition to the plans to set up the international taxation system, the G20 also launched a policy to regulate money laundering that involves cryptocurrencies.
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, this is not a Japan-only case; 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 on the pro-regulation side, the United States and China are cautious about developing an international taxation system for cryptocurrencies. Jiji stated that they expect a battle at next year’s G20 summit where Japan will be the leader, so the country will likely to be forced to take a difficult step in this case.