The Application of NFT Tax, Is It Necessary Or Not?

THECRYPTO.WATCH – The rise of NFT has made the OECD begin to examine tax policy issues. This relates to the next step in the application of NFT tax.

Policies that immediately reap the pros and cons. According to some parties, digital assets can only be considered as cash assets after they are sold.

According to Julian Jarige representing the OECD, the government should consider NFT taxes, it should be similar to or different from virtual currencies.

The OECD has even touted an analysis of the application of the tax. The application of  NFT tax later may differ according to the use case and the nature of ownership.

This was conveyed at a virtual conference organized by Hansuke Consulting last November. The OECD, quoted by Tax Notes, has issued a report in October 2020. This report is on virtual currency taxation and emerging tax policy issues where NFT is a key topic for further consideration.

Improper Application of NFT Taxes

NFT is considered a unique crypto asset. The value of an NFT cannot be measured the same as a fellow NFT or other crypto asset. The uniqueness of goods sold with NFT greatly affects the value of the NFT.

These artworks, video clips, GIFs, memes, digital trading cards, music, and other forms of digital representation will eventually become NFT.

The OECD considers it inappropriate for governments to tax all NFTs in the same way, although the main features of NFTs provide some indication of the treatment they should receive.

The most striking difference between NFT and payment token is that it is not a means to exchange or store value. NFTs are considered to represent rights to equity, such as investments, so that NFTs become closer to security or utility tokens.

If the NFT is taxed as property, the question is either a capital gains tax or a property tax.

The US government is said to be imminently enforcing NFT as cash. For NFT owners, be prepared to be subject to the application of NFT tax, which will apply later. What do you think of those who just want to invest in NFT? Do you agree or disagree with this tax application policy?


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