Integrating blockchain content into undergraduate taxation education
By Dr Elizabeth Morton (2 min read)
Well established principles of tax law are now back in the spotlight with the fast-paced evolution of the crypto economy. What an incredible time to be learning taxation!
Image source: Pixabay
Blockchain-related activities and developments offer both fascinating opportunities to delve into interpretations of tax law whilst enabling robust, real-world practical scenarios to work through for taxpayer outcomes.
Rather than exemplifying the fundamental principles of taxation using outdated scenarios, we have an opportunity to appreciate the challenges of tax interpretation using emerging technology.
Technology, whether automation, cloud, big data analysis or blockchain for example, is impacting not only the way in which practitioners operate (think anywhere from know your client (KYC) considerations, app stacking, working from home capabilities as just the tip of the iceberg), but the kind of work being considered is evolving too.
No doubt cryptocurrencies, such as Bitcoin, have made their mark; however, we have seen the emergence of much more as the blockchain metaverse continues to expand. Initial coin offerings (ICOs), central bank digital currencies (CBDCs), non-fungible tokens (NFTs), decentralised finance (DeFi), play-to-earn games (P2E or ‘GameFi’) and most recently decentralised autonomous organisations (DAOs)…
So, what are the tax implications of all this?
Well, it is complicated.
As I noted in the recent Crypto Research Frontiers article, this is a fundamental issue I am focused on.
That time where there is buzz in the room because of the latest successful innovation, evolution, or growth. That NFT sold for how much? Awesome! You lost your key and Bitcoin is now valued at how much? Damn! You are exploring that latest DeFi offering?
Nice!
What comes to my mind? Tax.
With each discussion, what do I raise? Tax.
This is not isolated to the Australian regulatory setting, however Blockchain is fundamentally challenging tax jurisdictions around the world.
As a co-author of John Bevacqua et al.’s Australian Taxation published by Wiley, I have been working with the team to bring together a series of crypto-related content to complement students’ journeys as they progress through their taxation studies for the second edition.
This series covers issues such as:
Blockchain technology and the evolving role of the tax practitioner
Global reach of blockchain-related activities and the digital economy
Blockchain beyond Bitcoin
Crypto-activities, CGT complexities and tax reform
Crypto assets as remuneration
Record keeping for crypto assets
Crypto donations
Cryptocurrency mining
Crypto-businesses and trading stock
Taxation implications of ‘airdrops’
The next generation of the firm?
Superannuation and crypto remuneration
Digital currency and GST
ATO data gathering of blockchain activity
Being able to learn and appreciate the tax implications of blockchain-related activities alongside tax practitioners is incredibly exciting. This feeds into issues of competency in tax practice.
What does competency in tax practice mean in the digital economy?
Figures from the ATO showed trades in cryptocurrency leapt 64 per cent in 2021, with more than half a million Aussies buying, selling or exchanging digital coins. – Philip King, Accountants Daily
If a tax practitioner’s client is involved in the crypto community, the tax practitioner must continue for example to:
ensure that the service they provide is provided competently (Code Item 7)
maintain knowledge and skills relevant to the tax agent services they provide (Code Item 8)
take reasonable care in ascertaining a client’s state of affairs (Code Item 9)
take reasonable care the ensure the tax laws are applied correctly (Code Item 10)
So how do we ensure the future tax practitioner is digital-economy ready?
By creating opportunities for critical thinking within the digital economy. By creating awareness of the complexities faced by practitioners in real time.
TLDR: Blockchain has made understanding tax cool
By Dr Elizabeth Morton