While crypto is still not widely accepted as a form of payment, some businesses in the United States accept it. For those businesses, it’s imperative to know what constitutes virtual assets for reporting and tax purposes. This way, you can ensure that your business stays on top of its financial responsibilities to the government.
What does the global tax transparency document by the Organization for Economic Co-operation and Development (OECD) say?
Before March 22, 2022, businesses that dealt with crypto assets relied on the definition of a virtual asset by the Financial Action Task Force (FATF). The FATF defines virtual assets as assets with digital presentations of value that may be digitally transferred or traded and can be used for investment or payment purposes. However, the OECD released a document that proposed revisions to the crypto framework and the crypto reporting regime.
Without getting too technical, the OECD’s Crypto-Asset Reporting Framework (CARF) defines crypto assets as assets created using cryptographic technology. These assets can be held and transferred without an administrator having complete visibility of transactions and without interacting with conventional financial intermediaries.
There are 4 types of transactions that are relevant and reportable under CARF. These transaction types include the following.
- Exchanges between fiat currencies (regular money) and crypto assets
- Interchanges of one or more crypto assets
- All crypto assets transfers
- Specified transactions for retail payment
Have a full-service accounting and bookkeeping service provider clarify any confusion.
There can be some confusion regarding what assets you should report based on these definitions. Thus, to stay out of that, you can hire a full-service accounting and bookkeeping service provider like our company, Integrity Accounting Solutions Inc. (IAS).
We have experts who are well-versed in the nuances of every new definition for all financial matters. Thus, Partnering with our company will ensure that your company’s financial future is secure.
We also have more than 220 years of heritage, offering experience and expertise that has empowered a diverse range of businesses in the past.
Visit our website and book a free consultation at your convenience. You can speak to us remotely or visit us at one of our offices in Glendale or Long Beach for an in-person session.
While we are a California-based company, we also serve clients from different parts of the country.
Thank you for your time and consideration.
The devoted team at IAS.