The standardization of global tax information on digital assets: an opportunity for companies in Colombia

Over the years, digital assets have gained popularity and have become an important form of investment and transaction. However, the lack of regulation in many countries and standardization in the tax field has generated uncertainty both for governments and for companies that operate with digital currencies.

In accordance with this, the Organization for Economic Cooperation and Development (OECD) has taken different steps to establish international standards on global tax reporting related to digital assets. In this blog, we will explore what the OECD is, how they have standardized global tax information on digital assets, and why this is crucial for companies that exchange digital currencies in Colombia.

What is the OECD?

La OECD is an international organization composed of 38 member countries, whose main objective is to promote policies that promote economic growth, development and social welfare. The organization is dedicated to cooperation in areas such as economy, trade, fiscal policy and governance.

Given the cross-border nature of digital assets and the need for appropriate regulation, the OECD has been working to standardize tax information related to them. This involves establishing clear guidelines and recommendations on how governments should approach the taxation of digital assets.

Read here: OECD standardises global tax reporting on digital assets.

The OECD has developed a framework to help countries identify fiscal challenges associated with digital assets and provide guidance on how to address them. This framework is based on three fundamental pillars:

1. Definition and classification of digital assets: this organization has proposed clear definitions and an appropriate classification of digital assets so that governments can better understand their nature and apply the corresponding tax regulations. 2. Information Collection: The OECD has recommended that countries require digital asset platforms and financial intermediaries to collect and share relevant information with tax authorities. This will allow for more effective tracking of transactions and tax evasion related to digital assets. 3. Taxation of digital assets: provide guidelines on how countries can tax digital assets fairly and effectively. This includes establishing clear tax policies, such as income and wealth taxes, to ensure that companies and individuals meet their tax obligations in relation to digital assets.

Importance for companies in Colombia:

The standardization of global tax information on digital assets by the OECD is of vital importance for companies in Colombia for several reasons:

• Regulatory Compliance: by adopting the OECD recommendations, Colombia can ensure compliance with international tax rules in relation to digital assets. This provides legal certainty both to local companies that operate with digital assets and to foreign companies that want to invest in the country. Adequate regulatory compliance avoids potential penalties and legal risks for companies.
  
  
• Transparency and trust: promotes transparency in transactions and helps to build trust in both investors and consumers. This is especially relevant in the digital asset market, where trust and security are critical to their widespread adoption.
  
  
• Preventing tax evasion: digital assets can be used to evade taxes and hide income. The standardization of global tax information helps governments, including the Colombian government, to track and control digital asset transactions, significantly reducing the risk of tax evasion. This guarantees fair competition between companies and contributes to adequate tax collection for the country's development.
  
  
• International Trade Facilitation: simplifies tax procedures and obligations for companies operating internationally. This reduces administrative complexity and facilitates cross-border trade, which can boost economic growth and the expansion of Colombian companies in the international arena.
  
  
• Participation in the global economy: by adopting OECD standards, Colombia is integrated into the international community and aligns with globally accepted tax practices. This strengthens the country's reputation as an attractive destination for foreign investment and encourages economic cooperation with other OECD member countries.

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The standardization of global tax information on digital assets plays a crucial role in the regulation and proper management of digital assets at the international level. In the case of Colombia, adopting these standards is essential to provide legal certainty, promote transparency, prevent tax evasion, facilitate international trade and strengthen participation in the global economy.