Germany’s Eurex derivatives exchange launched its euro-denominated Bitcoin exchange-traded note (ETN) Futures contract. It is based on London-based ETC Group’s centrally cleared BTCetc Physical Bitcoin (BTCE) Bitcoin exchange-traded product (ETP). The futures contract allows investors to track the price development of Bitcoin in a regulated environment and will be physically delivered in BTCE, which is 100% backed by Bitcoin and can be instantly converted by any investor into the underlying BTC.
This International Monetary Fund (IMF) paper discusses how digitalization has affected Asian economies and their corporate income tax (CIT) and value-added tax (VAT) systems. Digitalization raises new tax challenges and existing rules can be perceived as unfair. Existing income tax systems have been criticized as failing to confer taxing rights on jurisdictions where highly digitalized businesses have a large base of customers that generate value, but where they have no physical presence. Increasingly digitalized businesses may also have relatively more intangible assets, which are harder to value and easier to relocate, enabling profit shifting under existing rules. This may especially affect smaller, less developed economies.
The paper concludes that, for many Asian countries, additional efforts in taxation are necessary to meet their revenue mobilization needs. International tax reform towards greater destination-based income taxation in combination with a global minimum tax would ease pressures from international tax competition and allow countries to raise corporate income tax rates if desired. Further revenue mobilization efforts might be required to finance future spending needs. These could focus on broadening the tax base by removing tax holidays, exemptions, and other preferential tax treatments. These are common in developing Asia but are often ineffective and inefficient and could even become redundant under a global minimum tax.
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