PwC releases its 2022 Global Crypto Tax Report

In brief

PwC has released its 2022 Global Crypto Tax Report offering insight into key trends, developments, and challenges presented by developments in the global crypto tax space. 

The report highlights the trend of increasing tax regulation targeting the digital assets sector, as governments and bodies such as the Organisation for Economic Cooperation and Development (OECD) and European Union (EU) seek to create tax policy that keeps up with the pace of technological innovation. However, there is still a disparity in the coverage, definition, and tax treatment of digital assets between jurisdictions. 

This year’s report includes tax insights from 39 countries and covers emerging trends around crypto tax policy, including crypto-asset tax information reporting, taxation of crypto finance and decentralized finance (DeFi), and value added tax (VAT) and goods and services tax (GST) issues around non-fungible tokens (NFTs). 

The following key themes around crypto tax policy have emerged over the course of 2022, as noted in report:

• Tax reporting has become a reality for the industry. Major steps to regulate digital assets at a global level include the OECD’s Crypto Asset Reporting Framework (CARF) and updates to the Common Reporting Standard (CRS), DAC8 in the European Union, and new tax reporting rules in the United States.
• Tax policy developments are finally emerging, which reflect a balance between those likely to encourage or discourage crypto and digital assets.
• The indirect tax treatment of NFTs is receiving increased attention from governments. This creates operational challenges for NFT marketplaces, which often do not see themselves as financial services companies and often do not collect customer onboarding and know-your-customer (KYC) information.
• Early guidance, though still limited, is starting to emerge on DeFi in jurisdictions such as the United Kingdom and New Zealand.
• As the industry continues to grow in terms of users and adoption, we are seeing more software solution companies trying to address the increased need for tax reporting.