Companies that accept Bitcoin – expert warns of massive tax losses
Expert: Companies could avoid taxes thanks to Bitcoin payments. (Graphic: Shutterstock)
Should more and more companies accept Bitcoin and Co., the financial authorities face massive tax losses – especially in the event of bankruptcies. At least one bankruptcy expert is convinced of that.
Cryptocurrencies and taxes – this is a chapter of its own. Financial authorities around the world do not only have to deal with this issue with (private) investors. The authorities are likely to face a much greater challenge if more and more companies accept Bitcoin and other cryptocurrencies as a means of payment. According to a British bankruptcy expert, there is a risk of massive losses in tax revenues in this case – especially with regard to possible company bankruptcies.
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Bitcoin makes tax avoidance easier
Because then company leaders would be able to hide possible cash reserves from the authorities even more easily than before, says Julie Palmer, Managing Director at Begbies Traynor, which specializes in corporate insolvencies. The authorities would then have a harder time tracking where the money is coming from when winding up a company that has slipped into bankruptcy. Owners, employees or managers could also withdraw funds from the company unnoticed.
Without new regulations and tax plans, the government would face huge losses. The potential is unlimited. According to Palmer, how much money could be lost depends on how popular the offer of payment with cryptocurrencies will be. You can currently pay with Bitcoin at the office space provider Wework or the cosmetics company Lush. Rumor has it that this could soon also be possible with Amazon or Apple.
Until now, so it is said at the UK Guardian, criminals should have obfuscated cash flows through investment vehicles or offshore accounts. Now tax avoidance can be done by accepting crypto currencies and setting up crypto wallets. The UK Treasury Department said the experts were working to identify those who wanted to hide profits and other assets.
