Taxing Crypto-Asset Transactions : Foundations for a Globally Coordinated Approach / Shaun Parsons.

Format:

Book

Thesis/Dissertation

Author/Creator:

Parsons, Shaun, 1979- author.

Series:

IBFD Doctoral

IBFD Doctoral Series ; Volume 66

Language:

English

Subjects (All):

Cryptocurrencies--Law and legislation.

Cryptocurrencies.

Physical Description:

1 online resource (413 pages)

Edition:

First edition.

Place of Publication:

Amsterdam, Netherlands : IBFD, [2022]

Summary:

A systematic analysis of the nature of the possible taxable events arising from 25 significant crypto-assets, and the classification thereof within the model tax conventions.

Contents:

Cover

IBFD Doctoral Series

Title

Copyright

Acknowledgements

Chapter 1: Introduction

1.1. Crypto-assets, the digitalized economy and the international tax system

1.2. The creation of Bitcoin

1.3. The global proliferation of crypto-assets

1.4. Overview of this book

Chapter 2: Research Objective and Methodology

2.1. Research objective

2.2. Research paradigm

2.2.1. The legal research paradigm

2.2.1.1. Doctrinal research and comparative analysis

2.2.1.2. Reform-oriented research

2.2.2. Normative frameworks applied

2.2.2.1. The OECD Model

2.2.2.2. The UN Model Double Tax Convention between Developed and Developing Countries

2.2.2.3. The text of the articles of the model tax conventions

2.2.2.4. The principles of good tax design

2.3. Research methodology

2.3.1. Selection of the constant comparison research method

2.3.2. Application of the adapted constant comparison research method to this book

2.3.3. Use of computer-assisted qualitative data analysis software

Chapter 3: Review of the Current State of the Taxation of Crypto-Assets

3.1. Introduction

3.2. Observations

3.2.1. Differences in terminology

3.2.2. Differences in identity or nature

3.2.3. Limited number of legislative amendments

3.2.4. Differences in scope of taxpayers addressed

3.2.5. Differences in depth and breadth of engagement

3.2.6. Relative consistency in VAT treatment

3.2.7. Consensus on lack of fiat currency status

3.2.8. Contrasting positions on income tax consequences in different jurisdictions

3.3. Conclusion

Chapter 4: Crypto-Asset Analysis

4.1. Introduction

4.2. Proposed primary use cases

4.3. Identification of possible taxable events

4.4. Development of transaction categories

4.4.1. Origination

4.4.2. Original through fiat currency deposits.

4.4.3. Origination through sales of crypto-asset tokens by originators

4.4.3.1. ICO and other market sales

4.4.3.2. Investor sales

4.4.3.3. Recapitalization (debt auction)

4.4.4. Origination through remuneration or incentive

4.4.4.1. Developer allocation

4.4.4.2. Remuneration and other incentives

4.4.4.3. Third-party developers

4.4.4.4. Block rewards

4.4.5. Origination through fortuitous issuances and receipts

4.4.5.1. Airdrop participation

4.4.5.2. Hard fork

4.4.6. Origination through retention

4.4.7. Origination transaction structuring

4.4.8. Summary on origination

4.4.9. Possible uses by post-origination acquirers

4.4.10. Use as a medium of exchange

4.4.10.1. Payment solution

4.4.10.2. Inter-currency transfer

4.4.10.3. Payment of transaction fees

4.4.10.4. Payment of counterparty transaction fees

4.4.11. Use in involuntary transfers

4.4.11.1. Incentivized hacking

4.4.11.2. Theft

4.4.12. Use in holding

4.4.12.1. Minimum account balance

4.4.12.2. Network usage and network delegation

4.4.12.3. DPoS candidacy and delegation

4.4.12.4. Future hard fork and airdrop participation

4.4.13. Use in speculation and investment

4.4.14. Summary on possible uses by post-acquisition acquirers

4.4.15. Extinction

4.4.16. Extinction as a medium of exchange

4.4.16.1. Transaction and storage fees

4.4.16.2. DPoS candidacy

4.4.17. Extinction in speculation and investment

4.4.17.1. Repurchases

4.4.17.2. Surplus auctions (supply reduction)

4.4.18. Extinction through redemptions

4.4.19. Extinction through involuntary transfers

4.4.19.1. Penalties

4.4.19.2. Non-existent accounts

4.4.19.3. Lost access

4.4.20. Summary on extinction

4.5. Conclusion

Chapter 5: Tax Analysis of Identified Categories

5.1. Introduction.

5.2. Origination by fiat currency deposit

5.2.1. Introduction

5.2.2. Direct tax consequences for the originator

5.2.3. Direct tax consequences for the transferee

5.3. Sale of crypto-asset tokens by originators

5.3.1. Introduction

5.3.2. Rejection of classification as issuance of financial instrument

5.3.2.1. Debt instrument

5.3.2.2. Equity instrument

5.3.2.3. Derivative financial instrument

5.3.3. Rejection of classification as royalties - OECD Model Tax Convention

5.3.4. Rejection of classification as royalties - UN Model Double Tax Convention

5.3.5. Rejection of classification as fees for technical services - UN Model Double Tax Convention

5.3.6. Rejection of classification as income from immovable property

5.3.7. Classification as business profits

5.3.8. Rejection of classification as prepayment for future services

5.3.9. Classification as sale of intangible assets

5.3.10. Timing of income recognition

5.3.10.1. Issue of tokens convertible to native tokens in an ICO

5.3.10.2. Issue of tokens incorporating possible future hard fork or airdrop participation

5.3.11. Conclusion on income from the sale of crypto-asset tokens by originators

5.3.12. Direct tax implications for the originator

5.3.13. Direct tax implication for the transferee

5.4. Origination as remuneration or incentive

5.4.1. Introduction

5.4.2. Allocations retained

5.4.3. Allocation as remuneration or incentive

5.4.3.1. Direct tax consequences for the originator

5.4.3.2. Direct tax consequences for the transferee - as employee

5.4.3.3. Direct tax consequences for the transferee - as director

5.4.3.4. Direct tax consequences for the transferee - as independent provider (OECD Model)

5.4.3.5. Direct tax consequences for the transferee - as independent provider (UN Model).

5.4.4. Allocation to third-party developers

5.4.4.1. Direct tax consequences for the originator

5.4.4.2. Direct tax consequences for the transferee

5.4.5. Block rewards

5.4.5.1. Direct tax implications for the originator

5.4.5.2. Direct tax implications for the transferee

5.4.5.3. Proof-of-stake transaction validation

5.4.5.4. Delegation of participation rights

5.5. Fortuitous issuances and receipts

5.5.1. Introduction

5.5.2. Direct tax consequences for the originator

5.5.3. Direct tax consequences for the transferee

5.5.3.1. Hard forks

5.5.3.2. Airdrops

5.5.4. Fortuitous receipts and the determination of cost or basis

5.6. Retentions

5.6.1. Introduction

5.6.2. Direct tax consequences for the originator

5.7. Medium of exchange

5.7.1. Introduction

5.7.2. Tokens originated through fiat currency deposits

5.7.2.1. Direct tax consequences for the transferor

5.7.2.2. Direct tax consequences for the transferee

5.7.3. Tokens originated by all other means

5.7.3.1. Direct tax consequences for the transferor

5.7.3.2. Direct tax consequences for the transferee

5.8. Redemptions

5.8.1. Introduction

5.8.2. Direct tax consequences for the transferor

5.8.3. Direct tax consequences for the transferee

5.9. Holding

5.9.1. Introduction

5.9.2. Direct tax consequences for the holder/transferor

5.9.2.1. Network usage rights

5.9.2.2. Delegation of network usage rights

5.9.2.3. Disposal of tokens

5.9.3. Direct tax consequences for the transferee

5.10. Speculation and investment

5.10.1. Introduction

5.10.2. Tokens originated through fiat currency deposits

5.10.2.1. Direct tax consequences for the transferor

5.10.2.2. Direct tax consequences for the transferee

5.10.3. Tokens originated by all other means.

5.10.3.1. Direct tax consequences for the transferor

5.10.3.2. Direct tax consequences for the transferee

5.11. Involuntary transfer

5.11.1. Introduction

5.11.2. Direct tax consequences for the transferor

5.11.3. Direct tax consequences for the transferee

5.12. Conclusion - direct tax consequences of identified transaction categories

5.12.1. Classification in terms of the text of the articles of the model tax conventions

5.12.2. Considerations for domestic legislation

5.12.3. Diagrammatic representation of proposed outcomes

5.13. Testing of proposed outcomes against exemplar

5.14. Observations on indirect tax consequences of crypto-asset transactions

5.14.1. Introduction

5.14.2. Origination by fiat currency deposit

5.14.3. Sale of crypto-asset tokens by originators

5.14.4. Origination as remuneration or incentive

5.14.5. Fortuitous issuances and receipts

5.14.6. Retentions

5.14.7. Medium of exchange

5.14.8. Redemptions

5.14.9. Holding

5.14.10. Speculation and investment

5.14.11. Involuntary transfer

5.14.12. Conclusion - indirect tax consequences of identified transaction categories

Chapter 6: Tax Outcomes - Comparison with OECD 2020 Report on the Taxation of Virtual Currencies

6.1. Introduction

6.2. Direct tax - comparison of findings of this book with the OECD report

6.3. Indirect tax - comparison of observations of this study to OECD findings

6.4. Conclusion of comparison to OECD 2020 report

Chapter 7: Jurisdictional Taxing Rights - Current Application and Future Considerations

7.1. Current application

7.1.1. Introduction

7.1.2. Permanent establishment (article 5)

7.1.3. Business profits (article 7)

7.1.3.1. Negotiable debt instruments

7.1.3.2. Sale of intangible assets

7.1.3.3. Services rendered - block rewards and transaction fees.

7.1.3.4. Services rendered - incentive for services outside of an employment relationship.

Notes:

Description based on publisher supplied metadata and other sources.

Thesis (doctoral) volume 66-University of Cape Town, 2022

Description based on print version record.

Includes bibliographical references.

Other Format:

Print version: Parsons, Shaun Taxing Crypto-Asset Transactions: Foundations for a Globally Coordinated Approach

ISBN:

9789087228033