Crypto Tax Trends in 2022: Increased Reporting, Updated Rules, and a Wealth Tax Debate

Crypto isn’t a secret anymore, and nowhere is this more apparent than in the concerted efforts of various governments to make sure crypto traders pay taxes on their gains. 2021 saw an increasing movement towards the creation of taxation regimes for crypto, and 2022 might see more governments actually implementing such regimes and enforcing them.

 

According to tax experts speaking to Cryptonews.com, a few main trends could define crypto taxation in 2022. Most notably, we might see increased reporting requirements for crypto exchanges and trading platforms, while it’s also likely that governments will introduce rules intended to facilitate the cross-border exchange of info concerning transactions.

 

The construction of a monolithic reporting network will leave exchanges and other crypto businesses with little option other than blanket compliance. And once reporting guidelines for cryptoasset transactions have been fully implemented, we may see debates about tax crypto-based wealth heating up.

If you’re in the United States, you’ll find that, from this year onwards, it will become increasingly more difficult to hide any profits you make (via crypto trading) from the Internal Revenue Service (IRS). As international tax specialist Selva Ozelli notes, this is the result of changes proposed as part of the USD 1trn infrastructure bill signed into law in November.

 

“H.R. 3684, the Infrastructure Investment and Jobs Act, requires cryptocurrency ‘brokers’ -- which includes “any person who for consideration is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person” -- to report cryptocurrency and [non-fungible token, NFT] purchases of over USD 10,000 to the IRS on Form 8300, including names and Social Security numbers, or potentially face felony charges,” she told Cryptonews.com.

 

However, it’s worth pointing out that the crypto industry is already making efforts to reform the reporting provisions in the bill, with tax CPA (certified public accountant) Edward Zollars suggesting that their overly broad scope may be narrowed in the not-too-distant future.

 

Crossing the Atlantic, Niklas Schmidt, a lawyer and partner with the Austrian law firm Wolf Theiss, expects the EU to introduce legislation in 2022 aiming at a cross-border exchange of information regarding crypto transactions. As with the American example, this is to ensure that individual national governments can more effectively collect tax from crypto-derived capital gains.

 

“It had been announced that a draft proposal for a directive would be presented in the fourth quarter of 2021; since this did not happen, we can probably expect a draft in the first quarter of 2022,” he said.

 

Schmidt suggests that crypto exchanges in the EU would most likely have to collect certain information regarding their customers (such as name, address, taxpayer identification number, crypto transactions carried out, and crypto balances).  

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