Legal challenges related to virtual currencies especially in the field of taxation

Abstract

The appearance of the virtual currencies opens up several questions in the field of taxation of different transactions, gains, incomes with virtual currency involvement. Along with the significant economic (primarily monetary) impacts, there is a long list of legal issues related to the virtual currencies to be answered. Within the territory of these legal issues, this paper focuses mainly on the taxation of incomes, transactions, etc., received in or implemented by virtual currencies. The author gives a brief background of relevant regulatory issues and attempts of individual countries. The paper considers taxation issues that virtual currencies raise concerning the taxation of incomes and also to the sale of goods and services against the virtual currency. As a conclusion, the author emphasises the need for regulatory answers and univocal definition of tax obligations related to virtual currencies.