OECD Warns Crypto and Blockchain are Challenging Tax Transparency
The Organization for Economic Cooperation and Development (OECD) has issued a report to the G20 finance ministers and central bank governors. The report examines the accomplishments and aims of the OECD in advancing its efforts to “redefine the international landscape,” identifying new technologies cryptocurrencies and distributed ledger technology as posing unique challenges to “tax transparency.”
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OECD Discusses International Tax Agenda
The report asserts that the OECD, with assistance from the G20, has made “enormous strides” in implementing the OECD’s international “tax agenda.” The organization claims that its policies have resulted in a transition of the “global financial system” from “opacity and incongruity to transparency and coherence.”
Among the primary policy objectives sought by the institutions has been greater “tax transparency,” with the report stating that “tax transparency has been at the heart of the OECD’s role in the international tax area.
Despite boasting of numerous accomplishments with regards to fostering greater taxation transparency, the report identifies the increasing “digitalization of the economy” as giving rise to a number of significant challenges to the the OECD’s international policy objectives.
Cryptocurrencies Identified as Threat to Tax Transparency
The OECD states that “technologies like blockchain give rise to both new, secure methods of record-keeping while also facilitating “crypto-currencies” – which are described as “pos[ing] risks to the gains made on tax transparency in the last decade.”
Whilst the report states that “Some work is already underway to better understand and address these developments,” the OECD asserts that “further work is required to ensure that governments can harness the opportunities these changes bring while ensuring the ongoing effectiveness of the tax system.”
The report states that “The Forum on Tax Administration, working with the Inclusive Framework, will develop practical tools and cooperation in the area of tax administration and will also examine the tax consequences of new technologies (e.g., crypto-currencies and blockchain distributed ledger technology),” with an update on the forum’s findings expected to be delivered in 2019.
What is your reaction to the Organization for Economic Cooperation and Development’s report? Share your thoughts in the comments section below!
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