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The implications of adopting a European Central Bank Digital Currency: A Tax Policy Perspective

The implications of adopting a European Central Bank Digital Currency: A Tax Policy Perspective In the wake of growing interest around cryptocurrencies, the possible issuance by central banks of their own digital currency has been a topic of debate worldwide. However, little attention has been given to the relevancy of electronic and digital payments (including a possible digital euro) in the area of taxation, where policies limiting the use of cash are being intensively adopted all around the world. On one hand, tax policies fostering the use of electronic and digital payments as a Central Bank Digital Currency (CBDC) can help tax authorities to better monitor taxpayers’ transactions in the fight against tax evasion and fraud. On the other hand, important concerns arise in the areas of data protection and the digital divide. These two kinds of concern should be taken into account and addressed by policymakers before the adoption of both a CBDC and tax policies favouring its use at the detriment of cash. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png EC Tax Review Kluwer Law International

The implications of adopting a European Central Bank Digital Currency: A Tax Policy Perspective

EC Tax Review , Volume 30 (4): 12 – Jul 1, 2021

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Publisher
Kluwer Law International
Copyright
Copyright © 2021 Kluwer Law International BV, The Netherlands
ISSN
0928-2750
Publisher site
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Abstract

In the wake of growing interest around cryptocurrencies, the possible issuance by central banks of their own digital currency has been a topic of debate worldwide. However, little attention has been given to the relevancy of electronic and digital payments (including a possible digital euro) in the area of taxation, where policies limiting the use of cash are being intensively adopted all around the world. On one hand, tax policies fostering the use of electronic and digital payments as a Central Bank Digital Currency (CBDC) can help tax authorities to better monitor taxpayers’ transactions in the fight against tax evasion and fraud. On the other hand, important concerns arise in the areas of data protection and the digital divide. These two kinds of concern should be taken into account and addressed by policymakers before the adoption of both a CBDC and tax policies favouring its use at the detriment of cash.

Journal

EC Tax ReviewKluwer Law International

Published: Jul 1, 2021

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