PwC Annual Global
Crypto Tax Report 2020

Introduction

Background
Digital assets are a new and rapidly evolving asset class. While the term is used broadly to cover a wide range of assets thatare in digital form, in this report the term refers to digital representations of value recorded on distributed ledgers or
Blockchains which can be transferred, stored or traded electronically. These are sometimes also referred to as Digital
Financial Assets or Crypto-assets.
Digital assets are commonly grouped into the following categories:•

Payment tokens (alternatively referred to as cryptocurrencies or exchange tokens): Tokens that can be used as a meansof exchange for purchasing goods or services;•Utility tokens: Tokens which provide access to a platform or enable the holder to access a product or service (typically on
a Blockchain platform);•

Security tokens: Tokens which have the characteristics of securities because they confer some form of ownership right toan asset, right to future profit or right to repayment.

Digital assets have several characteristics that make them unique from a taxation perspective. They are worthy of
consideration, as existing tax rules have not typically been developed with digital assets in mind, and in many cases havenot kept up with developments in this space.

2 | PwC Annual Global Crypto Tax Report 2020

Objectives
This Report aims to evaluate and review the existing digitalassets tax guidance globally and identify areas where there
are gaps or where guidance may need to be refined andadded to as the industry evolves.

In particular the report looks at survey participants’ views of
the development of tax guidance internationally to date andto obtain a tax jurisdiction by jurisdiction view on:
1. Digital assets as a means of exchange
2. Digital assets as an investment class

While we do not seek to take a view in this report on therelative merits of the uses of digital assets or on howtransactions in digital assets should be taxed, it is clear to us
from our work that:

3. Trading and crypto exchanges

1. Digital assets are becoming increasingly common andare being used by a wider range of market participants;

To achieve this, PwC sought input from tax specialists
working at over 30 international PwC member firms2 on thedevelopment of digital asset tax regulations in theirrespective jurisdictions.

2. There are significant differences between jurisdictions on
how such assets are categorised for tax purposes and on
the guidance available to market participants seeking tocomply with their tax obligations. This can cause issues
if, for example, certain tax treatments or concessions are
only available to transactions in a defined asset class, butwhere digital assets do not meet that specific definition;
3. New use cases (such as many of the new Decentralised
Finance – or “DeFi” – applications) are constantly being
introduced. In many cases tax regulations struggle tokeep up with this pace of innovation; and4. Crypto lending, mining and issuance
5. Tax reporting

While this report focuses solely on taxation issues, it should
also be noted that there are some jurisdictions wheretransacting in crypto assets may be heavily restricted underlocal laws and regulations. We have not included suchjurisdictions in this survey – not least because they are
unlikely to have issued detailed guidance on taxation.
Please note that this content is for general information
purposes only, and should not be used as a substitute for
consultation with professional advisors etc.

4. The decentralised business models adopted by manyindustry participants do not require physical interactions
between counterparties or customers. The day to day
operations of most are highly automated and display thecharacteristics of digitally automated services. They
could therefore be impacted by Organisation for
Economic Co-operation and Development (OECD)
proposals (sometimes collectively referred to as BEPS
2.0) that would shift taxing rights away from the location
where such services are delivered, to the location of
the customer 1.
1 Please refer to the OECD Report to the G20

http://www.oecd.org/tax/oecd-secretary-general-tax-report-g20-financeministers-july-2020.pdf
2 PwC refers to the PwC network and/or one or more of its member

firms, each of which is a separate legal entity. Please see
www.pwc.com/structure for further details.

3 | PwC Annual Global Crypto Tax Report 2020

An overview of the developmentof tax guidance internationally

While Bitcoin was launched in 2009, our research shows that it took a further five years for tax authorities to begin issuing
substantive tax guidance on digital assets. The USA, Sweden and the UK took the lead in 2014. As the digital assets
industry has continued to evolve, we have seen a noticeable uptick in the number of jurisdictions that have issued tax
guidance, particularly in 2017-18 (see Figure 1).

Figure 1: Publications of tax guidance on digital assets
Guidance issued timeline

Germany
IrelandNumber of jurisdictions with guidance in place

Luxembourg
Malta
South Africa

25

Argentina

20

Denmark

Colombia

FranceJapan

SwedenSwitzerland

Liechtenstein
Singapore

Poland22

Hong Kong (S.A.R.)

23

19

United Statesof America

15

ThailandCanadaAustralia
Netherlands

10

5

Italy

United Kingdom

7

7

2014

2015

12

8

0
2016

2017

2018

Year guidance initially released

4 | PwC Annual Global Crypto Tax Report 2020

2019

2020

2021

How do countries compare?
While the timeline above shows the speed at which
jurisdictions have issued guidance, what is perhaps more
instructive is how comprehensive that guidance is. To help
compare between jurisdictions we have developed the
PwC Crypto Tax Index.

The index measures whether jurisdictions have issued
guidance in twenty different areas relevant to the taxation of
crypto assets. An average score for each jurisdiction is thencalculated. Not all questions are relevant to all jurisdictions(for example, Hong Kong does not charge any form of
indirect tax such as value-added tax “VAT”, goods andservices tax “GST” or sales tax). In such cases, the index is
calculated based on the average of the areas that are
relevant for that jurisdiction. It should also be noted that theindex simply measures whether a particular issue is coveredin the existing guidance of each jurisdiction. It does not giveany view as to the usefulness, quality orcomprehensiveness of the guidance.

PwC Crypto Tax Index

Liechtenstein
Malta
Australia
Switzerland
Singapore
Hong Kong
FranceSwedenCanadaItaly
UK
Netherlands
USA
Japan
Denmark
Ireland
South Africa
Colombia
Argentina
Germany
TaiwanPhilippines
VietnamPerú
TurkeyThailandSouth Korea
PolandUnited Arab Emirates
-

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Jurisdiction score
0 = no guidance has been release
1= guidance has been released in all 20 components of the index

5 | PwC Annual Global Crypto Tax Report 2020

What has guidance been issued on?
The guidance that has been issued to date is often focused on how to apply existing tax laws or policies to transactions,situations and structures that are unique to digital assets — rather than passing new legislation.

Percentage of jurisdictions with guidance issued for each of the components of the PwC Crypto Tax Index

61%

Calculation of capital gains on buy/sell of crypto-assets for individuals

39%

59%

Calculation of gains/losses on buy/sell of crypto-assets for businesses

41%

52%
48%

Direct taxation of mining income

48%

VAT/GST/Sales tax re trading payment tokens

52%

VAT/GST/Sales tax on mining income –e.g. mining new blocks under proof of work

37%

63%

30%

VAT/GST/Sales tax re trading utility tokens

70%

28%

Initial Coin Offerings (ICOs) and token
issuance – payment tokens

72%

28%

ICOs and token issuance – utility tokens

72%

26%

VAT/GST/Sales tax re trading/exchange of
security tokens

74%

24%

Taxation of hard forks

76%

24%

Taxation of airdrops

76%

24%

ICOs and token issuance – security tokens

76%

23%

Application of local finanical transactions taxes or
stamp duties to crypto-assets

77%

21%

Direct taxation of staking Income

79%

3%

VAT/GST/Sales tax on mining –transaction validation fees
Application of Common Reporting Standards(CRS) rules to virtual asset service providers (e.g.
crypto exchanges/wallet providers)
Taxation of crypto funds

0%

Crypto borrowing and lending and DeFi

100%

0%

Non-fungible tokens / tokenised assets

100%

0%

VAT/GST/Sales tax on staking income

100%

18%
4%

Guidance

6 | PwC Annual Global Crypto Tax Report 2020

No Guidance

82%
96%
97%

Of the 20 areas included in the PwC Crypto Tax Index, we
note that much of the available guidance lags a number ofyears behind the industry. For example, most of it focuses
almost exclusively on payment tokens, such as Bitcoin. It
deals with capital gains and VAT issues around thespending and exchange of such tokens, as well as thetaxation of proof of work mining income.
It is only since late 2018 that we have started to see
guidance on the taxation of token issuance — most likely
spurred on by the ICO boom of 2017. However, this is stillrare.
The result is that businesses that are pushing theboundaries of this technology to explore new businessmodels — especially when it is cross-border — are often
faced with significant tax uncertainty. Consequently, they will
have to go back to first principles to predict how policy
makers and tax authorities are likely to react in 3-4 years’
time. This can be very challenging for a start-up.

Figure 2: The breadth and sophistication of the available guidance

Number of jurisdictions with guidance

Basic guidance— direct/indirect• VAT Guidance on
exchange of
crypto-assets>• Taxing returns
on mining• Taxing gains on
disposal of digitalassetsThis is where the majority of guidance
currently focuses

More developed
guidance>• Taxing issuanceof utility tokens(ICOs)• Reporting
frameworks for
digital assets• Taxation of
Security token
issuance

E.g. Switzerland,Hong Kong,
Singapore>• Crypto
borrowing/lending)• Crypto Funds• Taxation ofstaking income

Korea (proposedfor 2020),
OECD CRS (inprogress)

Future steps?
• Taxation of Decentralised
Autonomous
Organisations (DAOs),
decentralised exchanges
and other DeFi
applications• non-fungible tokens/tokenised assets

Almost no guidance available

The next areas where tax authorities will need to focus —and where there does not appear to be any comprehensive
guidance — include (among others):•

The tax reporting obligations and responsibilities ofdigital asset exchanges (See section on Reporting
below); and•The taxation of proof of stake mining and transaction
validation income. This should include whether theincome has aspects of a financial return or is services
income, the international allocation of taxing rights
between source and residency of such payments, as wellas VAT;•

The taxation of Decentralised Autonomous Organisations(DAOs) that operate across borders without the need forhuman involvement or where human
involvement/oversight is decentalised and therefore noteasily attributed to a jurisdiction.

•

Principles-based guidance on the VAT implications ofselling different utility tokens. Currently there arepotential differences in VAT treatment country by country
and token by token, which makes compliance difficult;•

The taxation of DeFi. This should include how income
from DeFi platforms is taxed at the recipient level andwhether jurisdictions may seek to tax payments at source(similar to how withholding taxes are commonly applied
to interest payments in traditional finance);•

The taxation of security and asset-backed tokens —especially when these have aspects of hybridity between
security and utility tokens (with corresponding
implications for direct tax, VAT and transactions taxes);

We are aware that individual governments, as well asinternational bodies such as the OECD3 are actively
considering the taxation implications of Blockchain technology
and are looking to address some of these challenges.
Given the pace of change in the industry and the range ofuses for digital financial assets, it is important that future
guidance is principles-based and not overly prescriptive.
This will avoid it going out of date before it’s released andprevent tax from holding back the development of exciting
new business models that may not yet be conceived bypolicy makers. In addition, as the business models in thisindustry are so international and there is a relatively cleanslate to work from when it comes to tax and Blockchain,
there is definitely a role for policy coordination between tax
authorities.
3 https://www.youtube.com/watch?v=ZiOwRSq65w0 –as released by the OECD Global Blockchain Policy Centre

7 | PwC Annual Global Crypto Tax Report 2020

In some areas tax law is clear — but has unintended consequences for thedevelopment of the ecosystem
One of the main observations from survey respondents isthat a lack of guidance or laws specifically targeted towards
digital assets creates uncertainty. But there are also somesituations where the law is clear that certain tax treatments
are only available for transactions in specific assets (e.g.
currency or securities). Many digital assets do not meetthese definitions, which were drafted many years before theadvent of Blockchain technology. Examples which clearly
have an impact on players in the sector — whether intended
or not – include:1.

Crypto funds

Tax exemptions or trading safe harbours for investment
funds exist in many jurisdictions. The policy objective is totax investment income and gains in the hands of fundinvestors rather than taxing the fund itself in the location
where it is managed. These exemptions are often drafted toonly include funds investing in specific asset classes –crypto assets are often not included. This may significantly
slow the development of crypto funds in many jurisdictions
as they may be subject to an additional layer of tax
compared to traditional funds, which would typically quality
for these exemptions or safe harbours;

2.

Crypto lending

The lending of money and its subsequent repayment does
not generally create a taxable event – it is the interest on theloan that would typically be taxed. However, in countries
where crypto assets are not considered equivalent tomoney, there is a risk that a borrower or lender may betaxed at the point of borrowing or repaying a loan
denominated in a crypto asset — for example, the loan istreated as a taxable disposal by the lender when crypto loan
principal is extended with a subsequent repurchase at alater date. Some jurisdictions also have specific rules /dispensations on securities lending which seek to ensurethat the lender is only taxed on the lending fee, not on any
appreciation or depreciation of securities lent – even when
there has been a legal transfer of title. However, wherethese exist, many common crypto assets do not meet thedefinition of a security and often don't qualify.

3.

Crypto savings and pensions

Many countries offer tax-efficient wrappers for individual
saving — whether for pensions, education or otherpurposes. There are a number of situations where direct
investments in crypto assets may not qualify. However, withthe advent or more sophisticated investment products, it
may still be possible for investors to gain exposure to suchproducts.

2. https://www.youtube.com/watch?v=ZiOwRSq65w0 – As released by the OECD Global
Blockchain Policy Centre

8 | PwC Annual Global Crypto Tax Report 2020

Direct Tax

Digital assets as a means of exchange
One of the original use cases proposed for crypto-assets such as Bitcoin, was as a means of exchange. While there aremany practical benefits associated with using crypto assets in this way, the tax implications have often not been fully
accounted for by market participants.
Very few jurisdictions equate digital assets with money or currency for tax purposes. Instead, many of those that have issued
guidance view cryptocurrencies as some form of “property”. This is important as, in most jurisdictions, the disposal ofproperty is considered akin to a barter transaction and so results in a gain or loss that could be subject to tax.

Figure 3: Categorisation of digital assets for tax purposes

Property or intangiable property

OthersNo clarity or guidance

Own asset class

Tangible property

Foreign exchange or currency
0

1

2

3

4

5

6

7

8

9

10

Number of countries

Triggering a tax charge every time an individual spends using digital assets could be problematic. First, most consumers are
not equipped to calculate the gains or losses arising from each of their daily transactions. Using fiat currency to buy a coffee
or a pizza does not generally lead to a taxable event requiring reporting. But it would if you use Bitcoin in many jurisdictions.
This represents an immense barrier to mass adoption of cryptocurrencies as a means of exchange.

9 | PwC Annual Global Crypto Tax Report 2020

Figure 4: Taxation of spending of digital assets

PwC observations

Does spending digital assets for purposes of acquiring
goods and services lead to a tax charge for individuals inyour jurisdiction?

As we have identified, there are often significant tax
implications in using digital assets as a means of
exchange. It is, however, unlikely in our view thatgovernments will change their policies on taxing capitalgains just because of tax events triggered by
cryptocurrency spending. Therefore, if digital assets aregoing to become a useful means of exchange, theindustry will likely need to adapt in the following ways:

No

Not clear•

Increased development of software that can track
consumers’ crypto spending and calculate their tax
liabilities, thus relieving them of the administrative
burden of tax reporting.

•

Increased adoption of stable coins. Digital assets areoften volatile compared to fiat currency, leading to
the capital gains issue. The problem of consumers
having to account for taxes on every item of cryptocurrency spending could be mitigated by increased
adoption of stable coins. If these track a local
currency, it would significantly reduce volatility andthus avoid the need for complex tax calculations.

Yes — if carrying out
business activities
Depends

Yes

0

5

10

15

Based on our survey results, a clear majority of jurisdictions
seek to tax gains or losses arising from the disposal or
spending of digital assets — an even greater number seek
to do this if the individual is carrying out a business. But how
these gains or losses are calculated varies widely, as eachcountry has its own unique approach to determining suchthings as tax basis or holding period — which can affect therate of tax. For example, certain jurisdictions, such as
France and Germany, have specific guidance in place thatprovides relief for individuals based on criteria such as theholding period of the digital asset and the annual digitalasset trading turnover of the individual.

Figure 5: Different approaches to calculating base costs
for gains on disposal of digital assets
OthersNo specific guidance
Last In, First Out (LIFO)
Choice of First In, First Out(FIFO), LIFO and Specific Cost
FIFO or specificidentification method
FIFO
Depends
Coins are pooled, with basecost taken as average
Acquisition value
0

5

10

15

This wide variety of approaches makes it difficult to create astandardised solution for tracking disposals that is scalable
at an international level. Technology solutions are primarily
only available in the larger markets, such as the US, where
there is scale to support local vendors — although we areseeing this evolve.
10 | PwC Annual Global Crypto Tax Report 2020

Digital assets as an investment class
It is clear that there are investors who wish to hold digital assets in their portfolios, either as part of a diversification strategy,
because they wish to benefit from investment in the growth of a new technology, or even for speculation. The scope of thispaper is not to discuss the merits or otherwise of investing in digital assets, but rather to focus on the tax implications for
those that choose to do so.
As mentioned in the previous section, the majority of jurisdictions surveyed have some form of capital gains tax on digitalassets — but they differ in their application. Some jurisdictions (e.g. Hong Kong, Singapore) have no capital gains tax at all,whereas others (e.g. Malta, Portugal) do not tax capital gains on certain digital assets, such as payment tokens 4.
Other jurisdictions tax capital gains and losses, but not on crypto-to–crypto transactions. An example of this is France. Thiseffectively defers the tax date until the digital asset is converted to fiat currency or spent on goods or services. However,most jurisdictions will tax crypto-to-crypto disposals as well as crypto-fiat disposals.
The graph below shows events that are expected to crystallise a tax charge for individuals and corporates, according tosurvey respondents across various jurisdictions. Corporates are more likely to face tax consequences for all events, giventhat they are often subject to tax on their accounting profits — a concept which is not commonly applicable to individuals.

Figure 6: Events that would crystallise a tax charge

Disposal for digital assets (Crypto-to-Crypto)

Disposal for fiat currency or other readily convertible asset

Change of market value/unrealised gains/losses

0
Individuals

5

10

15

20

25

Corporates

Whether the transaction leads to a taxable event may also depend on the classification of the underlying asset and whether
the transaction arose as a result of trading or business activities.

4 E.g. for Malta there should not be any income tax on gains of a capital nature derived from the transfer of coins as defined in the Guidelines
published by the Maltese tax authorities.

11 | PwC Annual Global Crypto Tax Report 2020

Taxation of income from digital assets Security and asset backed tokens
Many digital assets are not income generating. However,this is changing, and we are seeing more and moresituations where income may arise. Sometimes the tax
characteristics of this income may be clear based on current
tax law and practice (e.g. dividend/interest income). At othertimes it may be less easy to neatly define the income.
Examples include:

Security tokens are designed as tradeable assets that areheld for investment purposes and classified as a security (orequivalent) under applicable laws.
There is a general lack of guidance on the tax treatment ofthese assets. However where guidance is available, there is
a common theme that security tokens which are in
substance tokenised equity or debt, can expect to be taxed
accordingly in many jurisdictions.

Figure 7:
Does your jurisdiction have any specific guidance regarding withholding tax associated with digital assets?

Yes

No guidance or clarity

Expect general principles to apply

Depends

Country does not levy withholding tax
05

However, problems may arise for security tokens that havehybrid features and therefore cannot be neatly compared to
non-digital securities. For example, some tokens may grant
the recipient access to some form of utility, or to receive
royalty or rental income from a tokenised asset.
In fact, asset-backed tokens may enable the direct fractional
ownership of an asset without the need for a corporate
wrapper. The tax implications for the holders of such assets,
particularly if they are in a different jurisdiction from theunderlying asset, can be complex. They can be even more
complex if the tax jurisdiction of the asset itself cannot beclearly defined (e.g. a non-fungible token representing an
income-generating asset in a video game). More guidance
would be welcomed as these instruments become
increasingly common and sophisticated.

12 | PwC Annual Global Crypto Tax Report 2020

10

15

20

25

30

In addition to general principles on how to characterise thereceipt of different forms of income, further guidance should
cover issues such as mechanisms for withholding income atsource (e.g. in cases where an issuer in one jurisdiction has
to make some form of payment to a recipient overseas).
This issue could be more acute in the context of digitalassets, as governments often task the collection ofwithholding taxes to centralised counterparties such as
custodians, banks, payment/letting agents or trustees —these may not be required in a decentralised environment
involving Blockchain.

Staking income

Tax incentives for savings

Tokens that provide for “proof of stake” mining andvalidation enable the owners of tokens to stake those
tokens. This gives them the right to validate transactions on
the Blockchain in exchange for a chance to earn staking
income. The staked tokens are typically locked up for aperiod of time and are also at risk if the staking party fails
to perform their validation functions properly.

In many countries, capital gains held in certain recognisedsavings or retirement schemes can be exempted from tax
or have the tax deferred (e.g. until retirement). However,crypto-assets directly held by individuals may not be
considered as qualifying investments in the majority ofcountries surveyed.

This is a considerably less resource and energy-intensive
method of transaction validation than traditional proof ofwork crypto mining and is becoming increasingly common.

•

Practical — many retirement plans must be
administered by a nominated third-party trustee oradministrator that holds the assets or property on behalfof the owner. The administrator acts in a fiduciary
capacity to help operate the plan in line with tax andregulatory requirements, including ensuring the custodyof assets held in the plan. This is required as, in manycases, there are restrictions placed on such plans toensure that they are true retirement savings plans andthat the owner cannot access the assets until retirement
without losing the preferential tax treatment. Many of the
traditional trustees/administrators of such plans are not
set up to manage digital assets.

•

Legal — in many cases, the laws governing such
retirement schemes are very specific on how
contributions or schemes can qualify. For example, in
the UK employers cannot make a contribution to aregistered pension scheme with payment tokens. This isbecause Her Majesty’s Revenue and Customs (HMRC)
does not consider such assets to be currency ormoney5. In addition, UK Individual Savings Accounts canonly invest in cash, stocks or shares.

The reasons for this may be both practical and legal.

We found very little guidance in any of the jurisdictions on
the taxation of staking income. Tax issues that remain to beresolved include:
1. Does staking income represent payment for services, orsome other kind of passive financial reward for tax
purposes? This may impact its tax treatment, dependingon the jurisdiction.
2. What is the taxation point of staking income? — forexample should this be taxed at the point of receipt of thestaking reward in native tokens, or not taxed until those
tokens are disposed of.
3. Which jurisdictions may claim taxing rights totransactions on a Blockchain that involve cross bordertransfers of value from users (who will often have to pay
to execute transactions on a Blockchain), to thosevalidating transactions and staking tokens who receive
staking rewards?

A key observation is that there is often no clarity as towhether a crypto asset can qualify for retirement savings
plan incentives (see graph below). However, funds holding
digital assets, such as bitcoin Exchange-traded funds(ETFs), may be more likely to qualify in some jurisdictions
than direct crypto holdings. This likely explains the push by
many providers to bring Bitcoin ETFs and other investment
products to market in recent years.
5 https://www.gov.uk/government/publications/tax-on-

cryptoassets/cryptoassets-tax-for-businesses

13 | PwC Annual Global Crypto Tax Report 2020

Figure 8:
Number of jurisdictions that allow digital assets to qualify for retirement savings schemes.

No retirement tax incentives

Not clear

Unlikely to qualify

May qualify

02

Bitoin ETFs

4

6

Security tokens

8

10

Utility tokens

12

14

16

18

20

Payment tokens

PwC observations•

Most jurisdictions are trying to fit digital assets into existing capital gains tax regimes.

•

There is very little guidance on how to treat the income arising from digital assets. In particular, the situations whenwithholding may or may not be required are not clear. In many cases, when transactions take place on a Blockchain, themechanisms for the collection of withholding taxes and/or making tax treaty claims for the reduction of withholding tax are
not yet developed. More clarity in this area is needed. In fact ironically – some form of Blockchain solution allowing tax
payers to validate their tax residency information/attributes to parties that would not otherwise have the means of
independently validating this information could actually be a natural solution to this problem.

•

Investment products are coming to market in spite of a lack of regulatory guidance and clarity. This poses a challenge toboth providers and customers in understanding their associated compliance requirements.

14 | PwC Annual Global Crypto Tax Report 2020

Indirect tax on the trading andexchange of digital assets

Indirect tax
VAT/GST
Governments with a VAT/GST regime in place would
typically consider cryptocurrency and related transactions to
be within that taxing regime.
In the European Union (EU), the VAT treatment of key
exchange transactions was established in 2014. EU tax
authorities issued guidance in response to a case taken to
the European Court of Justice concerning the VAT liability of
exchange transactions.
However, there continue to be variations between all
jurisdictions on the level and breadth of guidance issued by
tax authorities across the jurisdictions surveyed. In manycases, the available guidance has not kept pace with industry
development and does not consider newer token types, suchas security or utility tokens, or complex transactions.

The lack of comprehensive guidance, together withincreased complexity and diversity in the digital assets
supply chain, makes it difficult for suppliers, purchasers,
intermediaries and other trading infrastructure service
providers to determine the VAT liability of their services —particularly where these are supplied cross-border.
Complications also arise between the contrasting direct andindirect treatment of cryptocurrency exchange transactions.
For example, within indirect tax, the trading/exchange of
cryptocurrency for fiat or another cryptocurrency is often
seen as akin to a transaction in money or securities. In many
jurisdictions this leads to the application of the financial
services VAT exemption, meaning that the exchange does
not need to charge VAT to its customers. But this alsomeans that it is not possible to reclaim input VAT.
However, for crypto-to-crypto trades involving utility tokens(especially relevant given that many utility token trading pairs
offered on exchanges are with Bitcoin or Ethereum), theposition is much less certain and there is little guidance on
how the VAT rules in most jurisdictions should be applied.

Figure 9:
VAT/GST treatment of the exchange of payment tokens between a buyer and seller located in same jurisdiction.

Not a VATable event
Typically taxable
Typically exempt
No guidance or clarity
No VAT/GST regime
02

4

Payment Token - payment token

15 | PwC Annual Global Crypto Tax Report 2020

6

8

10

Payment token - Fiat Currency

1214Figure 10:
VAT/GST treatment of the exchange of utility tokens between a buyer and seller located in same jurisdiction.

Not a VATable event

Typically taxable
Typically exempt
No guidance or clarity
No VAT/GST Regime
0

2

4

6

Utility token - utility token

8

10

12

14

16

18

Utility token - fiat currency

Figure 11:
VAT/GST treatment of the exchange of security tokens between a buyer and seller located in same jurisdiction.

Not a VATable event
Typically taxable
Typically exempt
No guidance or clarity

No VAT/GST Regime
0

2

4

6

Security token - security token

8

10

12

14

16

18

Security token - fiat currency

US Sales Tax
In the United States, there is a lack of guidance on the application of U.S. sales and use tax to cryptocurrency and relatedtransactions. Historically, U.S. sales and use tax has been limited to transactions involving tangible personal property andcertain limited services as specifically defined by state taxing authorities. Although most states provide a definition of “digital
goods”, the scope of this definition does not generally contemplate cryptocurrency.
Few state jurisdictions have issued guidance on the taxability of cryptocurrency, and the limited guidance issued by statejurisdictions generally only contemplates payment tokens. For example, in 2018, Minnesota released a statementsummarizing the state’s position that, with respect to sales tax, payment tokens are considered another form of currency andare not otherwise subject to tax. Similarly, in 2019, Washington released a statement regarding bitcoin transactions. The
statement did not consider the actual application of sales tax to payment tokens. However, it implied that the state
considered payment tokens to be consideration for a transaction, as opposed to a taxable product or service.
State jurisdictions have yet to issue guidance with respect to utility or security tokens. There is uncertainty as to whether thestate jurisdictions will consider these tokens to be intangibles or if they will look-through to the underlying assets.

16 | PwC Annual Global Crypto Tax Report 2020

Stamp/transaction taxes
Stamp duties and transactions taxes are a type of indirect
tax which may be levied by governments on certaintransactions that involve the transfer of certain types ofproperty — for example, real estate or shares.
Compared to payment and utility tokens, securities tokens
present a unique consideration in terms of stamp/transaction
taxes in that their transfer may attract stamp duty charges.
To the extent that security tokens meet the definition of a“security”, jurisdictions including Taiwan, Switzerland andHong Kong many expect them to attract stamp
duty/securities transaction tax on trading in certain
circumstance. In July 2019, Taiwan’s Financial Supervisory
Commission (FSC) officially defined security tokens fulfillingcertain criteria as a type of security under the Securities andExchange Act, and thus they are subject to securities
transaction tax (STT).

Figure 12:
Does your jurisdiction charge stamp duty or any
other form of transactions tax on the trading of thefollowing?

Not clear

No

Yes

0

2

4

Security tokens

68

10 12 14 16 18 20

Utility tokens

Payment tokens

17 | PwC Annual Global Crypto Tax Report 2020

PwC observations•

Guidance from tax authorities remains limited tostraightforward transactions (i.e. trading of
payment tokens for payment tokens or fiat) andhas not kept up with industry developments.

•

Indirect tax considerations arise not just on theseller/buyer in a trade or exchange transaction, butwill also concern intermediaries and support
service providers in the supply chain.

•Those in the supply chain will find it difficult todetermine a single tax treatment for a supply, as it
differs by jurisdiction or is simply unpublished.
While certain exemptions are currently available
for transactions in cryptocurrency, this is by nomeans certain and could on occasion give rise to
the application of VAT.

•

There is very little guidance on the application ofstamp duties and transactions taxes to digitalassets. However, in come cases such taxes may
apply depending on the situation and the nature of
the underlying asset (particularly if this is deemed
to be a security under local law).

Token issuance

An Initial Coin Offering (ICO) or token sale is an event inwhich a new cryptocurrency project sells tokens in
exchange for money or crypto-assets such as Bitcoin or
Ethereum. ICOs provide a way for cryptocurrency project
creators to raise money for their operations. They came toprominence in 2017 and early 2018 but have since become
far less common as a means of raising capital — primarily
due to increased regulatory scrutiny.
In recent years, there has been increased interest in
regulated security token issuances, which are still in theirinfancy. In addition, we are also seeing some tokens issued
via so-called Initial Exchange Offerings (IEOs). IEOs areseen as less risky than ICOs as the token sale is conducted
via a trusted platform (usually an exchange) that canperform due diligence on the project team. This helps
reduce the risk of fraud, provides a trusted customer
interface through which the associated token is purchased
and brings AML/KYC benefits.
From a tax perspective, the treatment of the proceeds froma token sale will largely depend on the nature of the token
being sold — for example whether the token is a payment
token, utility token or security token. Tax issues that need tobe considered in a token sale can include:
1. The taxability and timing of taxation on the sales
proceeds for direct income tax purposes;
2. VAT issues associated with the sale of tokens; and3. Employment-related and payroll tax issues whengranting tokens to project team members as
remuneration.

18 | PwC Annual Global Crypto Tax Report 2020

Direct tax implications
While token sales came to prominence in 2017, there is stilla lack of clear guidance in the area from most jurisdictions.
The majority of survey participants responded that tax
authorities have not issued guidance on the taxation of
ICOs.

Figure 13:
Have tax authorities in your jurisdiction issued guidanceon the taxation of ICOs?

Yes (please provide
details and/or links)
No

Other (please specify)
0

5

10

15

20

25

While there has been relatively little formal guidance issued,
our survey respondents indicated that a majority ofjurisdictions would expect the income arising from the ICO
of a utility token to be taxable. There are some differences
between jurisdictions in terms of expected timing of taxation(e.g. cash basis or accruals basis).

Conversely most expect the tax treatment of a security
token sale to depend on how the token that is being issued
is characterised — i.e. as debt, equity or property – all ofwhich will have different tax consequences for both issuersand holders. It should also be noted that even fewer
jurisdictions have issued comprehensive guidance on the
taxation of security token issuances to date.
For utility tokens, most respondents expect the tax point tobe determined based on accounting principles. This is
helpful if the token sales proceeds are considered to bedeferred revenue and are taken to the profit and loss
account at the same time that the utility of the token isrealised. In addition to deferring the tax point, such atreatment would also assist in ensuring that tax deductions
for the build out of the project have a maximum chance ofbeing deductible.

Indirect tax
Guidance by tax authorities on the indirect tax treatment oftoken issuance is sparser than that available for token
trading or exchange.
Existing tax rules are expected to apply depending on thetype of token issued. The issuance of a payment token is
not likely to be taxed if it is treated as analogous to the issue
of a security.
The indirect tax treatment of the issuance of security andutility tokens will be determined by the security, or rights togoods/services represented by the token.
The taxation of utility tokens is particularly unclear, as it will
depend on the (level of) rights awarded to the token holder.
Several jurisdictions believe that if the token affords theholder the same rights as a voucher, those rules (whichmainly affect when VAT is due) may apply.
Uncertainty for the issuer of the VAT liability may also affecttheir ability to recover VAT incurred on the costs of theissue. This can be a problematic area — a number ofprojects have ended up with large unintended VAT liabilities.

In our experience, taxing the proceeds of an ICO on a cash
basis can be problematic. ICOs are often carried out to fundfuture development work and thus paying tax on a cash
basis is likely to cause difficulties in obtaining tax deductions
for future expenses.

Figure 14: Expected taxation point for a utility
token sale

PwC observations•

There is relatively little guidance published on the
taxation of token sales. However, generally it should
be assumed that token proceeds will be taxable inmost jurisdictions, although there may bedifferences in the timing of taxation.

•

VAT on the sale of utility tokens can be a complex
area, for which there is very little guidance or
precedent to date.

Expected application of tax rules to ICOs

3%
20%

3%
50%
7%

17%

Accounting basis

Cash basis

Depends

ICOs not permitted

Lack of clarity

Tax upon divestment

19 | PwC Annual Global Crypto Tax Report 2020

Tax reporting

Tax information reporting is often an important tool for tax
authorities to manage tax compliance within theirjurisdiction. The quality of the information obtained by tax
authorities is dependent on third parties collecting accurate
information.
Blockchain transactions create both challenges andopportunities for tax authorities: On the one hand, all thetransaction data is publicly available and visible to anybody
that has the technology to review the audit trail stored on theledger. This would definitely not be the case in an off-chain
environment. However, on the other hand, there is often
little information on the identity of the users/wallet holders —although this can sometimes be determined with a bit ofdetective work and forensics.
Digital asset transactions pose unique compliancechallenges to tax authorities that are heavily reliant on selfassessment to collect tax. This is because of the relative
anonymity with which transactions in many crypto assets
can be performed.
Currently, there are two global third-party information
reporting requirements that apply broadly to financialtransactions.

20 | PwC Annual Global Crypto Tax Report 2020

The Foreign Account Tax Compliance Act (known as
FATCA) requires US and non-US financial institutions toreport payments and balances received and maintained bycertain US account holders.
The Common Reporting Standard (CRS) is the other tax
information reporting requirement. It applies to non-US
financial institutions and requires reporting on payments andbalances received and maintained by account holders thatare resident in participating jurisdictions. The OECD sets thebroad requirements for CRS, with each jurisdiction
implementing conforming legislation and regulations.
Historically, digital assets (earnings, balances etc.) have notbeen included in either FATCA or CRS information reporting
obligations. However, this is changing quickly — a numberof tax reporting requirements have recently been enacted or
are in the pipeline which will give tax authorities significantly
more information about the identity and tax residence ofwallet holders.

Figure 15: Tax reporting implications will depend on the counterparties to a transaction

Information reporting by
exchanges

Tax returnself-assessment

Centralised
Exchanges

DAC6

CRS/FATCA

The exact requirements for reporting and who has thereporting obligation depends on the facts and circumstancesof the transaction. For example, individuals transacting peer
to peer may have no formal reporting requirements otherthan to disclose the relevant income/gains in their tax
returns. However, there may be different requirements
placed on intermediaries such as exchanges, as well as onwallet providers and custodians. These different aspects ofreporting are summarised in the diagram above.

21 | PwC Annual Global Crypto Tax Report 2020

Specific examples of reporting requirements include:•

For transactions where one party is carrying on abusiness in the EU, the EU Directive on Administrative
Cooperation (DAC) 6 may apply. DAC6 imposesmandatory reporting for cross border transactions by
taxpayers and intermediaries to the tax authorities if
those transactions have certain hallmarks. It also
mandates the automatic exchange of information among
EU member states. Transactions in crypto assets may
trigger some of these hallmarks particularly incircumstances where the intermediary has reason tobelieve the transaction in question is a cross-border one
resulting in a tax benefit.

•

CRS — While we have seen evidence of some exchanges
gathering CRS related information, it does not appear to
be common practice currently. However, there is also alarge proportion of the industry where the application of
the rules in their current form do not appear to apply
and/or their jurisdiction is unclear. Therefore, manyexchanges have decided not to incur the administrative
burden of reporting. Because of this, the OECD iscurrently looking at how to expand CRS to cover virtual
asset service providers, including digital asset exchanges.
However, details of exactly how, and what will be caught,
as well as the timing of any changes, are not currently
publicly available.

•

FATCA — imposes rigorous reporting, withholding andcompliance requirements on entities registered on theInternal Revenue Service (IRS) Foreign Financial
Institution (FFI) list. FATCA is imposed on FFIs and US
financial institutions that have custody of assets
belonging to US taxpayers. The US IRS has publishedguidance that crypto assets are treated as
undifferentiated property. FATCA reporting is often
conditioned on the relevant account holders holding cash
or financial assets. If FATCA is changed to apply todigital assets, some companies may be required toregister with the IRS and comply with FATCA
requirements.

•

Some recent developments identified with respect toreporting include:- The United States — there are tax information
reporting and withholding obligations imposed under
the US Income Tax Code. These requirements follow
general income tax concepts that apply broadly tocertain transactions and payees. These requirements
are not specific to the unique characteristics of crypto
assets. In 2019, the US IRS indicated that it isformulating specific tax information reporting andwithholding obligations that will apply broadly tocrypto assets. This forthcoming guidance is expected
to focus on gross proceeds reporting fromtransactions engaged in by certain US payees.
- Taiwan — in July 2019, Taiwan issued
comprehensive reporting requirements for crypto
exchanges conducting trading in securities tokens. In
the same month, Taiwan's FSC officially defined
security tokens fulfilling certain criteria as a type of
security under the Securities and Exchange Act.
However, for the exchange and management of adigital wallet for other forms of digital assets (e.g.
payment tokens/utility tokens), it is not yet clear if
these would be defined as financial assets.
Consequently, so far there is no guidance as towhether these would be subject to CRS reporting
requirements.
- Korea — in July 2020, Korea announced new rules
requiring local exchanges to withhold 20% tax on all
crypto-currency trading gains.

22 | PwC Annual Global Crypto Tax Report 2020

PwC observations•

Currently, most tax authorities rely on voluntaryself-assessment and reporting of income tax
liability. In order to maintain compliant tax systems,
tax authorities often rely on third-party tax
information reporting and, potentially, withholding.
Specific third-party tax information reporting on
crypto asset transactions is not currently requiredby most tax authorities, but more jurisdictions are
introducing requirements.

•

The introduction of CRS rules targeted at crypto
exchanges, and additional requirements being
implemented in the US, will likely be a gamechanger, as this is expected to provide tax
authorities with the identity and tax residence ofthe customers of the digital asset exchanges thatwill be required to report. When combined with thetransaction level data that are already publicly
available on many public Blockchains, this is likely
to give tax authorities significantly greater visibilityof the trading activities of market participants thatare within their tax jurisdiction and has thepotential to greatly enhance tax enforcement.

Summary and conclusions

Digital assets have several characteristics that make themunique from a taxation perspective and therefore worthy of
consideration, as existing tax rules have not typically beendeveloped with digital assets in mind.

This paper shows that significant work has been done overthe last few years by tax authorities to provide guidance totaxpayers. However, we have also observed that theguidance that has been issued has not kept up to date withrecent developments in the industry.
What this means is that those businesses that are pushing
the boundaries of the technology to explore new businessmodels — especially those that transcend nationalboundaries — are often faced with significant tax
uncertainty. They will have to go back to first principles andpredict the likely reaction of policy makers and tax
authorities in 3-4 years time. This can be very difficult for astart-up organisation.

Given the rate of change in the industry, as well as thebreadth of applications for digital financial assets, it will be
important that future guidance issued is principles-based andnot overly prescriptive. This will avoid the guidance becoming
out of date before it’s released and prevent tax from holdingback the development of exciting new business models that
may not yet be conceived by policy makers. In addition, given
the fact that business models in this industry are sointernational and that there is a relatively clean slate to workfrom when it comes to tax and Blockchain, there is definitely arole for policy coordination between tax authorities.

Key contributors
Editorial team:Peter Brewin | Tax

Henri Arslanian | Global Crypto Leader

Tel: +852 2289 3650

Tel: +852 2289 2490

p.brewin@hk.pwc.com

henri.arslanian@hk.pwc.com

Mazhar Wani | Tax

Nadia Fediaeva | Tax

Tel: +1 (415) 515 4451

Tel: +852 2289 8842

mazhar.wani@pwc.com

nadia.fediaeva@hk.pwc.com

Individual PwC member firm contributors from each jurisdiction are listed in the Appendix.

23 | PwC Annual Global Crypto Tax Report 2020

Appendix — Selected Survey
results by jurisdiction and
PwC contacts

Argentina
Direct Tax

Indirect Tax

Guidance issued

Yes

Guidance issued

No guidance

Link & Other comments

N/A

Link & Other comments

N/A

Their own asset class(e.g., Crypto-asset)

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?

How are Digital Assettokens (e.g. Bitcoin)classified for the
purposes of determining
their direct tax
treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

Payment Token

Utility Token

Security Token

Typically exempt

No guidance/clarity

Typically exempt

FIFO

Contacts
Ignacio Rodríguez
Partner
PwC Argentina
Tel: +54 11 4850 6714
ignacio.e.rodriguez@pwc.com

Juan Manuel Magadan
Director
PwC Argentina
Tel: +54 11 4850 6847
juan.manuel.magadan@pwc.com

Juan José Glusman
Senior Associate
PwC Argentina
Tel: +54 11 4850 0000
juan.jose.glusman@pwc.com

Francisco Puncini
Associate
PwC Argentina
Tel: +54 11 4850 0000
francisco.puncini@pwc.com

24 | PwC Annual Global Crypto Tax Report 2020

Mauricio Mesas
Senior Manager
PwC Argentina
Tel: 54 11 4850 0000 ext. 4912
mauricio.mesas@pwc.com

Australia
Direct Tax

Indirect Tax

Guidance issued

Yes

Link & other comments

Non-binding guidance has
been issued by theAustralian Tax Office(ATO). In addition, 3Taxation Determinations
were released in 2014
with respect to thetreatment of bitcoin for
specific parts of theAustralian tax legislation.
https://www.ato.gov.au/Ge
neral/Gen/Tax-treatmentof-crypto-currencies-inAustralia---specificallybitcoin/

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Dependent on the featuresof the token - for token
raises typically treated as
equity interests akin toshares; otherwise forcryptocurrency
businesses, tokens aretreated as trading stock.

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No specific guidance fromthe ATO so in practice thisis subject to taxpayer
discretion.

Guidance issued

Link & other comments

https://www.ato.gov.au/busine
ss/gst/in-detail/yourindustry/financial-servicesand-insurance/gst-and-digitalcurrency

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

ExemptDepends

ExemptContacts
Direct Tax

Indirect Tax

Sarah Hickey
Partner
PwC Australia
Tel: +61 417 311 860
sarah.a.hickey@pwc.com

Matthew Strauch
Partner
PwC Australia
Tel: +61 408 180 305
matthew.strauch@pwc.com

25 | PwC Annual Global Crypto Tax Report 2020

Yes

CanadaDirect Tax
Guidance issued

Yes

Link & other comments

To date, there is no federal or provincial tax legislation in Canada specific to crypto
currencies or transactions involving crypto currencies. Additionally, the Canadian
Department of Finance has not provided any indication as to when legislation may beforthcoming. Canada Revenue Agency (""CRA""), the agency responsible foradministering taxes in Canada, has provided some administrative guidance on federal
income tax considerations associated with crypto currencies, however the guidance isquite high level, and not particularly favorable to taxpayers.
https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agencycra/compliance/digital-currency/cryptocurrency-guide.html

How are Digital Asset payment
tokens (e.g. Bitcoin) classified
for the purposes of determining
their direct tax treatment

Commodity

Does your jurisdiction have any
guidance regarding tax
basis/base cost determination
for digital assets disposed of forincome or capital gains tax
purposes?

Determining the tax basis of digital assets will depend on whether they are consideredinventory or capital property. If the cryptocurrencies are considered to be inventory, use
one of the following two methods of valuing inventory consistently from year to year:(i) value each item in the inventory at its cost when it was acquired or its fair market
value at the end of the year, whichever is lower (ii) value the entire inventory at its fairmarket value at the end of the year (generally, the price that you would pay to replace anitem or the amount that you would receive if you sold an item). If the cryptocurrencies are
considered to be capital property, the adjusted cost base (ACB) must be tracked, which
is usually the cost of a property plus any expenses to acquire it, such as commissions
and legal fees. Special rules can sometimes apply that will allow you to consider the costof the capital property to be an amount other than its actual cost.

Indirect Tax

What is the best description of the VAT/GST outcomeon the exchange of fiat for payment, utility andsecurity tokens between a buyer & seller both
located in your jurisdiction?

Guidance issued

Yes

Link & othercomments

On 17 May 2019, the Department of Financereleased a set of draft legislative proposals
relating in part to the application of GST/HST
to digital assets. Based on proposed changes,
digital assets that meet qualifying conditions
will be considered as "virtual payment
instruments" and "financial instruments". As
such, their use, exchange or supply would
generally qualify as a financial service. These
proposed amendments would be deemed tohave come into force on 18 May 2019.

Payment Token

Utility Token

Security Token

Depends

Depends

Typically exempt

Contacts
Direct Tax

Indirect Tax

Spence McDonnell
Partner
PricewaterhouseCoopers LLP
Tel: +1 416 869 2328
spence.n.mcdonnell@pwc.com

Brent MurrayPartner
PricewaterhouseCoopers LLP
Tel: 416-947-8960
brent.f.murray@pwc.com

Ryan Hoday
Director
PricewaterhouseCoopers LLP
Tel: +1 416 815 5226
ryan.w.hoday@pwc.com

Mario Seyer
Partner
PricewaterhouseCoopers LLP
Tel: 514-205-5285
mario.seyer@pwc.com

26 | PwC Annual Global Crypto Tax Report 2020

Colombia
Direct Tax

Indirect Tax

Guidance issued

Yes

Guidance issued

Yes

Link & other comments

Ruling 20436 of 2017

Link & other comments

According to Ruling 20436
of 2017 of the Colombian
Tax Office,cryptocurrencies are
considered as assets
where the owner is theuser.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Intangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

FIFO, LIFO

Contacts
Carlos Chaparro
Partner
PricewaterhouseCoopers SLT Ltda.
Tel: +57 6340555
carlos.chaparro@pwc.com
Manuel Rubio
Tax Manager
PricewaterhouseCoopers SLT Ltda.
Tel: +57 6340555 ext. 10446
manuel.rubio@co.pwc.com

27 | PwC Annual Global Crypto Tax Report 2020

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Not a VATable
event

Not a VATable
event

Not a VATable
event

Denmark
Direct Tax

Indirect Tax

Guidance issued

Yes

Link & other comments

In accordance with Danish
tax legislation, bitcoins
and other cryptocurrencies
are considered ordinary
assets subject to gains
taxation provided that
there is speculative
intention (i.e. intent of resale). As a main rule thepurchase of
cryptocurrencies will beconsidered speculationfrom a Danish tax
perspective.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Tangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

FIFO

Contacts
Lasse Jensen
Director
PwC Denmark
Tel: +45 24464570
lasse.glyngo.jensen@pwc.com
Alex Antonescu
Senior Manager
PwC Denmark
Tel: +45 29383374
alexandru.a.antonescu@pwc.com

28 | PwC Annual Global Crypto Tax Report 2020

Guidance issued

Yes

Link & other comments

It is stated in the official VAT
guideline from the Danish tax
authorities that transactions to
exchange the virtual currency
for traditional currencies is
VAT exempt with reference tothe ECJ case C264/14

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

No guidance/clarity

No guidance/clarity

France
Direct Tax

Indirect Tax

Guidance issued

Yes

Link & other comments

Article 150 VH bis of theFrench tax code (FTC),
Article 1649 bis C(reporting requirements),
Article 41 duovicies J andK, Article 344 G decies
and undecies, Appendix III
of the French tax code.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Intangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

FIFO

Guidance issued

Yes

Link & other comments

Administrative guidelines(BOI-RES-000054-20190807)
on VAT applicable to ICOs

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically taxable

Typically taxable

Typically taxable

Contacts
Direct Tax

Indirect Tax

Jessica Castro-Oudni
Director
PwC Société d’Avocats
Tel: +33 (0) 7 86 06 23 60
jessica.castro-oudni@avocats.pwc.com

Anne Christine Bossler
PwC Société d’Avocats
anne-christine.bossler@avocats.pwc.com

Virginie Louvel
PwC Société d’Avocats
virginie.louvel@avocats.pwc.com

29 | PwC Annual Global Crypto Tax Report 2020

Germany
Direct Tax

Indirect Tax

Guidance issued

LimitedGuidance issued

27/02/2018

Link & other comments

N/A

Link & other comments

Statements have been
issued by the government,
which declare the aim to
set rules for regulation ofdigital assets. There isalso a statement by thefederal ministry of financeon the regulation of digitalassets. However, they do
not yet imply tax rules.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Intangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

General opinion FIFO;
other opinion average

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

Contacts
Dr. Mathias Link
Partner, Financial Services
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
Office: +49 69 95856171
Mobile: +49 15 163309968
mathias.link@pwc.com

30 | PwC Annual Global Crypto Tax Report 2020

Stefanie Latrovalis
Manager, Financial Services
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
Office: +49 21 19817886
Mobile: +49 17 15513164
stefanie.latrovalis@pwc.com

Gibraltar
Direct Tax
Guidance issued

Indirect Tax
No

Link & other comments
How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No clarity/guidance

Guidance issued

N/A

Link & other comments

N/A

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No VAT/GST
regimeNo VAT/GST
regimeNo VAT/GST
regimeNo specific guidanceContacts
Patrick Pilcher
Partner, Tax
PricewaterhouseCoopers Limited
Direct: +350 20066842 Ext 309
patrick.pilcher@pwc.com

Luke Walsh
Director, Accounting Advisory Services
PricewaterhouseCoopers Limited
Direct: +350 20066842 Ext 205
Mobile: +350 54008565
luke.walsh@pwc.com

31 | PwC Annual Global Crypto Tax Report 2020

Paul McGonigal
Senior Manager
PricewaterhouseCoopers Limited
Direct: +350 20066842 Ext. 303
paul.mcgonigal@pwc.com

Hong Kong S.A.R.
Direct Tax

Indirect Tax

Guidance issued

Yes

Guidance issued

N/A

Link & other comments

https://www.ird.gov.hk/eng/pdf/dipn39.pdf

Link & other comments

N/A

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

Virtual Commodity

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No VAT/GST
regimeNo VAT/GST
regimeNo VAT/GST
regimeNo specific guidance, but
generally we would expect
tax to follow theaccounting treatment.

Contacts
Peter Brewin
Partner
PricewaterhouseCoopers Limited
Tel: +852 2289 3650
p.brewin@hk.pwc.com

Gwenda Ho
Partner – Corporate Tax Services
PricewaterhouseCoopers Limited
Tel: +852 2289 3857
gwenda.kw.ho@hk.pwc.com

Jesse Kavanagh
Partner
PricewaterhouseCoopers Limited
Tel: +852 2289 1100
Jesse.Kavanagh@hk.pwc.com

Jacqueline Yan
Senior Manager
PricewaterhouseCoopers Limited
Tel: +852 2289 3530
jacqueline.yan@hk.pwc.com

Tommy Hui
Senior Manager
PricewaterhouseCoopers Limited
Tel: +852 2289 3990
tommy.hui@hk.pwc.com

Philip Moralee
Senior Manager
PricewaterhouseCoopers Limited
Tel: +852 2289 3580
philip.r.moralee@hk.pwc.com

32 | PwC Annual Global Crypto Tax Report 2020

Ireland
Direct Tax

Indirect Tax

Guidance issued

Yes

Link & other comments

Revenue Guidance:
Taxation of cryptocurrencytransactions (May 2018)https://www.revenue.ie/en/
taxprofessionals/tdm/incometax-capital-gains-taxcorporation-tax/part-02/0201-03.pdf

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Guidance not definitive.
While may not be afinancial asset, treatedsimilar to foreign currency.

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

FIFO for non-tradingtransactions, whereastransactions taxable aspart of a trade are taxed inline with statutory financial
statements.

Guidance issued

Yes

Link & other comments

https://www.revenue.ie/en/tax-professionals/tdm/incometax-capital-gains-taxcorporation-tax/part-02/02-0103.pdf

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

ExemptNo guidance/clarity

No guidance/clarity

Contacts
Direct Tax

Indirect Tax

Antoinette Ryan
Director
PwC Ireland
Tel: +353 87 820 8669
antoinette.ryan@pwc.com

Emma O’Dea
PartnerPwC Ireland
Tel: +353 87 292 6795
emma.odea@pwc.com

Pat Convery
Director
PwC Ireland
Tel: +353 87 280 9810
pat.convery@pwc.com

Avril McDowell
PwC Ireland
Tel: +353 85 102 8381
avril.mcdowell@pwc.com

33 | PwC Annual Global Crypto Tax Report 2020

ItalyDirect Tax
Guidance issued

Other

Link & other comments

The Italian tax authority released several tax rulings addressing specific cases.
Only two of them have been published. The first ruling published in 2016 refers
only to bitcoin transactions and leverages on the European Court of Justiceposition. Accordingly, it qualifies bitcoin as foreign currencies and extends tobitcoin the Italian tax rules provided for this case. The second ruling published in2018 deals with the tax issues generated by the issuance through an initial coinoffering and the assignment of an utility token.

How are Digital Asset payment tokens(e.g. Bitcoin) classified for the purposesof determining their direct tax treatment

Does your jurisdiction have any
guidance regarding tax basis/base cost
determination for digital assets
disposed of for income or capital gains
tax purposes?

For individual direct taxation - Payment tokens (bitcoin and similar) are
assimilated and treated as foreign currencies (according to and following theconclusions reached by the ECJ in C-264/14).
For corporate direct taxation - the qualification should depend on accounting
standards but it is uncertain.
For individuals - No guidance has been provided, so general rules should beapplicable. The taxable basis depends on the type of the tokens.

For corporates - No guidance has been provided, so general rules should beapplicable. The taxable basis is determined through tax adjustments to theaccounting value.

Indirect Tax
Guidance issued

Yes

Link & other comments

Resolution no. 72/E of
2nd September, 2016

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

Contacts
Direct Tax

Indirect Tax

Dario Sencar
Partner
TLS Associazione Professionale di Avvocati e Commercialisti
Direct: +39 02 91605038
Mobile: +39 346 1368643
dario.sencar@pwc.com

Alessia Angela Zanatto
Partner
PwC TLS Avvocati e Commercialisti
Direct: +39 02 91605728
Mobile: +39 3480010291
alessia.zanatto@pwc.com

Giovanni Falsitta
Director
PwC TLS Avvocati e Commercialisti
Direct: +39 02 91605253
Mobile: +39 348 1565354
giovanni.falsitta@pwc.com

Luca Lavazza
Partner
PwC TLS Avvocati e Commercialisti
Direct: +39 02 91605701
Mobile: +39 349 6509210
luca.lavazza@pwc.com

34 | PwC Annual Global Crypto Tax Report 2020

JapanDirect Tax

Indirect Tax

Guidance issued

Yes

Guidance issued

Yes

Link & other comments

Consumption Tax Law

Link & other comments

FAQ in 2017, updated
FAQ in 2018 and 2019,
tax reform in 2019 FAQ,
Income Tax Law,
Corporation Tax Law, tax
reform in March 2019 on
individual income taxationand corporate taxation.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Their own asset class(e.g., Crypto-asset)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

Coins are pooled withbase cost taken as
average

Contacts
Kenji Nakamura
Partner, Financial Services & Real Estate
PwC Tax Japan
Tel: ＋81 (0) 3 5251 2589
kenji.nakamura@pwc.com

35 | PwC Annual Global Crypto Tax Report 2020

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?

Payment Token

Utility Token

Security Token

Not a taxable event

No guidance/clarity

No guidance/clarity

Liechtenstein
Direct Tax
Guidance issued

Indirect Tax
Yes
https://www.llv.li/files/onlin
eschalter/Dokument3212.pdf

Link & other comments
https://www.llv.li/files/onlin
eschalter/Dokument3160.pdf
How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Intangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

Income from wealth isexempt from income tax
for individuals, however
subject to wealth tax.

Guidance issued

Yes

Link & other comments

N/A

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

Typically taxable

Typically exempt

Contacts
Martin A Meyer
Partner
PricewaterhouseCoopers AG
Office: +41 58 792 42 96
Mobile: +41 79 348 36 13
martin.meyer@ch.pwc.com

36 | PwC Annual Global Crypto Tax Report 2020

Yves Stadler
Senior Manager, Tax and Legal Services
PricewaterhouseCoopers AG
Office: +41 58 792 7455
Mobile: +41 76 570 0509
yves.stadler@ch.pwc.com

Luxembourg
Direct Tax
Guidance issued

Yes

Link & other comments

The circular of the Luxembourg tax authorities dated 26 July 2018
essentially provides that virtual currencies, like Bitcoin, should be seen as
intangible assets for Luxembourg tax purposes and should be taxed
accordingly. Circular dated 26 July 2018 from the Luxembourg tax
authorities: https://impotsdirects.public.lu/damassets/fr/legislation/legi18/circulaireLIR14-5-99-3-99bis-3du26072018.pdf

How are Digital Asset payment tokens (e.g.
Bitcoin) classified for the purposes ofdetermining their direct tax treatment

Property (Intangible)

Does your jurisdiction have any guidance
regarding tax basis/base cost determination
for digital assets disposed of for income orcapital gains tax purposes?

The average weighted acquisition cost method is a default method
applicable only where the tax payer cannot establish the acquisition date of
the asset accurately. Long-term capital gains (more than 6 months) derived
by individuals from the disposal of digital assets are exempt from income tax
in Luxembourg provided certain conditions are met. Capital gains derived bycertain Luxembourg corporate entities from the disposal of digital assets are
exempt from income tax and net wealth tax in Luxembourg provided certain
conditions are met.

Indirect Tax
Guidance issued

Yes

Link & othercomments

The Luxembourg VAT authorities
published a circular letter on 11
June 2018 following the Hedqvist
case from the Court of Justice of
the EU. The Luxembourg VAT
authorities confirmed that the
VAT exemption applicable to fiat
as per article 135, 1, e of the
VAT directive was also
applicable to digital currency
such as bitcoins, provided thatthese digital currencies can only
be used for payment and areconsidered as an alternative to alegal tender.

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?

Payment Token

Utility Token

Security Token

Typically exempt

No guidance/clarity

No guidance/clarity

Contacts
Frederic Wersand
Partner
PwC Luxembourg
Office: +352 49 48 3111
frederic.wersand@lu.pwc.com

37 | PwC Annual Global Crypto Tax Report 2020

Marc Meurant
Director, Direct Tax
PwC Luxembourg
Office: +352 49 48 3348
marc.meurant@lu.pwc.com

MaltaDirect Tax

Indirect Tax

Guidance issued

Yes

Link & othercomments

The Maltese Commissioner for
Revenue issued guidelines on
the Income Tax Treatment oftransactions or arrangements
involving DLT assets:
https://cfr.gov.mt/en/inlandrev
enue/legaltechnical/Documents/Guidelin
es%20DLTs%20Income%20tax.pdf

How are Digital
Asset payment
tokens (e.g. Bitcoin)classified for the
purposes ofdetermining theirdirect tax treatment

The classification of an asset
does not determine the direct
tax treatment. Having said
this, the tax treatment of digitalasset payment tokens is
identical to the tax treatmentof transactions involving fiat
currencies.

Does yourjurisdiction have any
guidance regarding
tax basis/base cost
determination for
digital assets
disposed of forincome or capitalgains tax purposes?

No specific guidance

Guidance issued

Link & other comments

38 | PwC Annual Global Crypto Tax Report 2020

https://cfr.gov.mt/en/vat/guidel
ines_to_certain_VAT_Proced
ures/Documents/Guidelines%
20-%20DLTs%20VAT.pdf

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

Typically taxable

Typically exempt

Contacts
Mirko Rapa
Partner
PwC Malta
Tel: +356 2564 6738
mirko.rapa@pwc.com

Yes

Michael Borg
Senior Manager
PwC Malta
Tel: +356 2564 2427
michael.borg@pwc.com

Netherlands
Direct Tax
Guidance issued

Yes

Link & other comments

May 28, 2018(https://www.rijksoverheid.nl/documenten/kamerstukken/2018/05/28/beantw
oording-vragen-vaste-cie-financien-fiscale-aspecten-cryptovaluta),
November 30, 2017 (https://www.ndfr.nl/NTFR/Details/NTFR2017-2912),
August 1, 2013 (https://www.ndfr.nl/NTFR/Details/NTFR2013-1520), March
20, 2014 (https://www.ndfr.nl/NTFR/Details/NTFR2014-917).

How are Digital Asset payment tokens (e.g.
Bitcoin) classified for the purposes ofdetermining their direct tax treatment

Foreign exchange / currency

Does your jurisdiction have any guidance
regarding tax basis/base cost determination
for digital assets disposed of for income orcapital gains tax purposes?

From a tax perspective, Crypto is classified as either stock or assets, whichshould be valued at the purchase price or the lower market value (in casethere is a substantial difference between purchase price and the lower
market value).

Indirect Tax
Guidance issued

No guidance

Link & other comments

Which of the following best describes VAT/GST on theexchange of Tokens between a buyer & seller both
located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

Typically taxable

Typically exempt

Contacts
Direct Tax

Indirect Tax

Stan Berings
Partner
PricewaterhouseCoopers Belastingadviseurs N.V
Tel: +31 (0) 88 7921156
stan.berings@pwc.com

Edwin van Kasteren
Director
PricewaterhouseCoopers Belastingadviseurs N.V.
Tel: +31 (0) 61 0934258
edwin.van.kasteren@pwc.com

Kevin Dubbeld
Senior Associate
PricewaterhouseCoopers Belastingadviseurs N.V
Tel: +31 (0) 88 7922643
kevin.x.dubbeld@pwc.com

Gijs van de Wouw
Senior Associate
PricewaterhouseCoopers Belastingadviseurs N.V.
Tel: +31 (0) 63 0021542
gijs.van.de.wouw@pwc.com

39 | PwC Annual Global Crypto Tax Report 2020

Peru
Direct Tax

Indirect Tax

Guidance issued

No

Guidance issued

No guidance

Link & other comments

N/A

Link & other comments

N/A

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No Clarity/Guidance

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

No specific guidanceContacts
Carlos Rodriguez Summers
Partner
PricewaterhouseCoopers\ Gaveglio Aparicio y Asociados Sociedad Civil
de Responsabilidad Limitada
Tel: +51 922 905 998
carlos.rodriguez.summers@pwc.com

40 | PwC Annual Global Crypto Tax Report 2020

Philippines
Direct Tax

Indirect Tax

Guidance issued

No

Guidance issued

No guidance

Link & other comments

N/A

Link & other comments

N/A

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

The Philippines tax
authority (BIR) has not yet
issued any specific rules
and regulations applicableto cryptocurrency (e.g.,
Bitcoin). Someinterpretations however,treat cryptocurrency asproperty or assets and if
the same is adopted by
the BIR, there would beincome tax consequenceson the gain/loss uponsale/transfer or exchangeof such assets.

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No specific guidanceContacts
Jaffy Azarraga
Director
PwC Philippines
jaffy.y.azarraga@pwc.com

41 | PwC Annual Global Crypto Tax Report 2020

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

Singapore
Direct Tax

Indirect Tax

Guidance issued

4/17/2020

Link & other comments

https://www.iras.gov.sg/ira
shome/uploadedFiles/IRA
SHome/eTax_Guides/etaxguide_CI
T_Income%20Tax%20Tre
atment%20of%20Digital%
20Tokens.pdf

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

Guidance issued

11/19/2019

Link & other comments

https://www.iras.gov.sg/irasho
me/uploadedFiles/IRASHome/e-Tax_Guides/eTax%20Guide_GST_Digital%
20Payment%20Tokens.pdf

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
No Clarity/Guidance
Payment Token

Utility Token

Security Token

Typically exempt

Typically taxable

Typically exempt

No specific guidanceContacts
Rose Sim
Partner
PwC Singapore
Tel: +65 9623 9817
rose.sim@pwc.com

42 | PwC Annual Global Crypto Tax Report 2020

Seok Hong Seow
Director
PwC Singapore
Tel: +65 9816 0634
seok.hong.seow@pwc.com

South Africa
Direct Tax
Guidance issued

Yes
https://www.sars.gov.za/Media/MediaReleases/Pages/6-April-2018---SARSstance-on-the-tax-treatment-of-cryptocurrencies.aspx#:~:text=As%20such%2C%20cryptocurrencies%20are%20not,assets%20
of%20an%20intangible%20nature.&text=(i)%20A%20cryptocurrency%20can%
20be,through%20so%20called%20%E2%80%9Cmining%E2%80%9D

Link & other comments
As cryptocurrencies are neither official South African tender nor widely used
and accepted in South Africa as a medium of payment or exchange,
cryptocurrencies are not regarded by the South African revenue authority(SARS) as a currency for income tax purposes or capital gains tax. The tax
treatment of any transaction must be considered on a case by case basis.
How are Digital Asset payment tokens(e.g. Bitcoin) classified for the purposesof determining their direct tax treatment

Financial asset/security

Does your jurisdiction have any
guidance regarding tax basis/base cost
determination for digital assets disposedof for income or capital gains tax
purposes?

FIFO

Indirect Tax
Guidance issued

Yes

Link & other comments

VAT exempt financial
service

Contacts
Asif Joosub
Associate Director
PwC South Africa
Tel: +27 (21) 529 2305
asif.joosub@pwc.com
Annemarié Janse van Rensburg
Senior Manager
PwC South Africa
Tel: +27 (71) 326 5925
annemarie.janse.van.rensburg@pwc.com

43 | PwC Annual Global Crypto Tax Report 2020

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security
tokens between a buyer & seller both located in yourjurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

Typically exempt

Typically exempt

South Korea
Direct Tax

Indirect Tax

Guidance issued

No guidance

Guidance issued

No guidance

Link & other comments

N/A

Link & other comments

It is currently expectedthat the Korean
government will announce
tax laws to specificallydeal with certain aspectsof cryptocurrencytransactions in the second
half of 2020.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

No Clarity/GuidanceDoes your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No specific guidanceContacts
Changho Jo
Partner
Samil PricewaterhouseCoopers
Tel: +822 3781 3264
changho.jo@pwc.com

44 | PwC Annual Global Crypto Tax Report 2020

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

SwedenDirect Tax
Guidance issued

Yes

Link & other comments

Guidance from the Swedish Tax Agency on 23 April 2014:
https://www4.skatteverket.se/rattsligvagledning/327766.html
and 24 April 2015
https://www4.skatteverket.se/rattsligvagledning/338713.html?date=2015-0424&q=mining
Verdict from the Supreme Administrative Court of Sweden from 4 December
2018:
https://www.domstol.se/globalassets/filer/domstol/hogstaforvaltningsdomstolen/
avgoranden/2018/hfd-2018-ref.-72.pdf

How are Digital Asset payment tokens(e.g. Bitcoin) classified for the purposesof determining their direct tax treatment

According to case law they shall be treated as "other assets" for Swedish
income tax purposes.

Does your jurisdiction have any
guidance regarding tax basis/base cost
determination for digital assets disposedof for income or capital gains tax
purposes?

Coins are pooled with base cost taken as average.

Indirect Tax

Guidance
issuedLink & othercomments

Yes
Tax Agency guidelines for trading of
crypto currency were issued in 2017,and later replaced by updated
guidelines in 2018, see link:
https://www4.skatteverket.se/rattsligva
gledning/372981.html.

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

No guidance/clarity

No guidance/clarity

Further, yet another update waspublished
7 July 2020:
https://www4.skatteverket.se/rattsligva
gledning/edition/2020.9/322322.html#
update_20200629143346

Contacts
Direct Tax

Indirect Tax

Daniel Glü ckman
Partner
PwC Sweden
Tel: +46 729 80 91 77
daniel.gluckman@pwc.com

Jesper Oberg
Partner
PwC Sweden
Tel: +46 725 84 95 53
jesper.oberg@pwc.com

Simon Jisander
Manager
PwC Sweden
Tel: +46 725 80 04 68
simon.jisander@pwc.com

Jonas Fagerhäll
Senior Manager
PwC Sweden
Tel: +46 725 80 05 88
jonas.fagerhall@pwc.com

45 | PwC Annual Global Crypto Tax Report 2020

Switzerland
Direct Tax

Indirect Tax

Guidance issued

Yes

Guidance issued

Yes

Link & other comments

N/A

Link & other comments

Working paper released
regarding cryptocurrencies
and ICOs, IITOs as asubset of income andprofit tax, wealth tax,
withholding tax and stamp
duties.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Foreign exchange /currency

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No specific guidance

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

Typically taxable

Typically exempt

Contacts
Direct Tax

Indirect Tax

Martin Burri
Senior Manager
PricewaterhouseCoopers AG
Tel: +41 58 792 45 00
martin.burri@ch.pwc.com

Marcella Dzienisik
Senior Manager I VAT for financial services
PricewaterhouseCoopers AG
Tel: +41 58 792 4938
marcella.dzienisik@ch.pwc.com

46 | PwC Annual Global Crypto Tax Report 2020

TaiwanDirect Tax

Indirect Tax

Guidance issued

No guidance

Link & other comments

No guidance issued by the
tax authority; however,according to regulator's
position toward Bitcoin, it
is deemed as “virtualcommodity.”

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Intangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No specific guidance

Guidance issued

No guidance

Link & other comments

Taiwan's FSC has officiallydefined security tokens
fulfilling certain criteria as a
type of securities under
Securities and Exchange Act.
According to the Article 1 &2of Securities Transaction Tax
Act, trading of securities, withthe exceptions ofgovernment-issued bonds,
shall be subject to securities
transaction tax (STT); theseller of securities shall pay
STT for each transaction at
0.1%.

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?

Payment Token

Utility Token

Security Token

No guidance/clarity

Typically taxable

Typically taxable

Contacts
Jessie Chen
Partner
PricewaterhouseCoopers Taiwan
Tel: +886 2 2729 5360
jessie.chen@pwc.com

Ellen Kuo
Partner
PricewaterhouseCoopers Taiwan
Tel: +886 2 2729 6717
ellen.kuo@pwc.com

Yu-Chen Hu
Director
PricewaterhouseCoopers Taiwan
Tel: +886 2 2729 6666 #23634
yu-chen.hu@pwc.com

Alicia Wang
Manager
PricewaterhouseCoopers Taiwan
Tel: +886 2 2729 6666 #23132
alicia.h.wang@pwc.com

47 | PwC Annual Global Crypto Tax Report 2020

Thailand
Direct Tax

Indirect Tax

Guidance issued

5/14/2018

Guidance issued

No guidance

Link & other comments

N/A

Link & other comments

The Revenue Code (themain tax law in Thailand)
was amended to include
within the definition of“assessable income” (i)dividends/profits shares
derived from ownership ofdigital tokens and (ii)capital gains derived fromthe transfer of digitaltokens or currency.

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Intangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No specific guidanceContacts
Paul Stitt
Partner
PwC Thailand
paul.stitt@pwc.com

48 | PwC Annual Global Crypto Tax Report 2020

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

Turkey
Direct Tax

Indirect Tax

Guidance issued

No guidance

Guidance issued

No guidance

Link & other comments

N/A

Link & other comments

N/A

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No Clarity/Guidance

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

No specific guidanceContacts
Direct Tax

Indirect Tax

Umurcan Gago
Partner
PwC Turkey
Office: +90 212 326 60 98
Mobile: +90 533 309 60 21
umurcan.gago@pwc.com

Baris Dikici
Consultant
PwC Turkey
Office:+90 212 326 60 60
Mobile: +90 531 930 4323
baris.dikici@pwc.com

Deniz AgacManager
PwC Turkey
Office: +90 212 326 39 53
Mobile: +90 533 457 8605
deniz.agac@pwc.com

Ahmet Solmaz
Tax Technology Coordinator
PwC Turkey
Office: +90 212 326 6927
Mobile: +90 506 827 5667
ahmet.solmaz@pwc.com

49 | PwC Annual Global Crypto Tax Report 2020

United Arab Emirates
Direct Tax

Indirect Tax

Guidance issued

No guidance

Guidance issued

No guidance

Link & other comments

No guidance

Link & other comments

N/A

No guidance

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No guidanceContacts
Darsha Murugan
Senior Associate
PricewaterhouseCoopers
Tel: +971 54 793 3468
darsha.murugan@pwc.com

50 | PwC Annual Global Crypto Tax Report 2020

Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

United Kingdom
Direct Tax

Indirect Tax

Guidance issued

Yes

Link & other comments

https://www.gov.uk/govern
ment/publications/tax-oncryptoassets

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

Property (Intangible)

Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

Coins are pooled withbase cost taken as
average.

Guidance issued

Yes

Link & other comments

https://www.gov.uk/governme
nt/publications/tax-oncryptoassets/cryptoassetstax-for-businesses

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

No guidance/clarity

No guidance/clarity

Contacts
Direct Tax

Indirect Tax

Graham T Robinson
Partner
PricewaterhouseCoopers LLP
Tel: +44 (0)7725 707297
graham.x.robinson@pwc.com

Andrew Millin
Director
PricewaterhouseCoopers LLP
Tel: +44 (0)7887 833566
andrew.g.millin@pwc.com

Nick Chouksey
Director
PricewaterhouseCoopers LLP
Tel: +44 (0)7841 803594
nikhil.chouksey@pwc.com

Helen Mellor
Senior Manager
PricewaterhouseCoopers LLP
Tel: +44 (0)7483 399289
helen.mellor@pwc.com

51 | PwC Annual Global Crypto Tax Report 2020

United States
Direct Tax

Indirect Tax

Guidance issued

Yes

Link & other comments

Notice 2014-21, RR 201924

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment
Does your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

Property

FIFO, Specific cost

Guidance issued

Yes

Link & other comments

For Sales Tax - see multiple
states such as New York,
California, Texas, Colorado,
Wyoming, Ohio, New York

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?
Payment Token

Utility Token

Security Token

Typically exempt

No guidance/clarity

No guidance/clarity

Contacts
Overall

Direct Tax

Indirect Tax

Information Reporting

Mazhar Wani
Partner
PricewaterhouseCoopers LLP
Tel: +1 (415) 515 4451
mazhar.wani@pwc.com

Rebecca Lee
Partner
PricewaterhouseCoopers LLP
Tel: +1 202 280 5721
rebecca.e.lee@pwc.com

Dorothy Lo
Director
PricewaterhouseCoopers LLP
Tel: +1 415 652 7156
dorothy.lo@pwc.com

Candace Ewell
Partner
PricewaterhouseCoopers LLP
Tel: +1 202 280 9278
candace.b.ewell@pwc.com

52 | PwC Annual Global Crypto Tax Report 2020

VietnamDirect Tax

Indirect Tax

Guidance issued

No guidance

Guidance issued

No guidance

Crypto assets are notlegal in Vietnam so no tax
guidance exists.

Link & other comments

N/A

Link & other comments

What is the best description of the VAT/GST outcome on
the exchange of fiat for payment, utility and security tokens
between a buyer & seller both located in your jurisdiction?

How are Digital Assetpayment tokens (e.g.
Bitcoin) classified forthe purposes ofdetermining their direct
tax treatment

No Clarity/GuidanceDoes your jurisdiction
have any guidance
regarding tax basis/basecost determination for
digital assets disposedof for income or capitalgains tax purposes?

No guidanceContacts
Dinh Thi Quynh Van
Partner
PwC (Vietnam) Limited
Tel: +84 2439462246
dinh.quynh.van@pwc.com

53 | PwC Annual Global Crypto Tax Report 2020

Payment Token

Utility Token

Security Token

No guidance/clarity

No guidance/clarity

No guidance/clarity

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