7 crypto leaders share tips to help Web3 companies prep for tax season

cointelegraph.com:

No company looks forward to tax season, but for Web3 businesses, preparing can be particularly difficult. Global operations subject Web3 businesses to a variety of tax regulations and compliance requirements, and many regions lack regulatory clarity. Different digital tokens may have different tax statuses, making correct classification and reporting a tremendous challenge. The complexity is further increased by having to keep meticulous records of various cryptocurrency transactions, dealing with crypto-to-crypto swaps and managing market volatility.

Further, the incorporation of blockchain and cryptocurrency data into accounting systems presents additional technological obstacles that the overall tax accounting software market hasn’t caught up with yet. And last — but certainly not least — Web3 companies are likely to come under increased tax authority scrutiny. The bottom line? In all their operations, Web3 companies must constantly keep an eye on the tax implications of their activities and diligently work to ensure they’re meeting their obligations. Below, seven members of Cointelegraph Innovation Circle share their experience to help Web3 companies prep for a (relatively) smooth and simple tax season.

On-time payment of taxes and proper clarity with the tax authorities can prevent unnecessary harassment. Crypto businesses are seen with a degree of suspicion throughout the world — even in those countries that are supposed to be crypto-friendly, like Singapore. Further, it is very important to choose a tax-friendly country such as the United Arab Emirates to lower your business expenditures. – Abhishek Singh, Acknoledger

Web3 companies approaching tax season should engage with a tax professional who is well-versed in