A newly released federal report commissioned by U.S. Rep. Tom Emmer (R-MN) focuses on the tax treatment of new tokens obtained by cryptocurrency mining or staking, otherwise known as “block rewards,” and reviews their tax treatment around the world.
“With the help of the Law Library of Congress, we have a comprehensive overview of the tax treatment and implications in 31 countries around the globe,” Rep. Emmer said. “It is clear that the United States can still be a leader in establishing principles for the proper taxation of digital assets.”
While tax authorities in several countries have published guidance on the taxation of mined tokens, such as Bitcoin and other cryptocurrencies, only a few specifically address the taxation of tokens received through staking, a process of obtaining reward tokens in the newer “proof-of-stake” cryptocurrencies, according to the report, Taxation of Cryptocurrency Block Rewards in Selected Jurisdictions.
For countries where no explicit taxation rules on block rewards are available, the Law Library of Congress report provides information such as general taxation rules, proposed legislation, official statements, and comments from legal scholars and tax experts that could be helpful in understanding how block rewards may be treated for tax purposes, the report says.
“In order for these technologies to thrive and reach their revolutionary potential, we must have the knowledge and organizational landscape of the approaches to regulation to best implement the proper path forward that will not stifle this innovation,” said Rep. Emmer, who is co-chair of the Congressional Blockchain Caucus. “We can improve the clarity of IRS taxation while at the same time ensuring these taxes are sensibly applied.”