{"id":59768,"date":"2023-09-04T20:30:30","date_gmt":"2023-09-04T20:30:30","guid":{"rendered":"http:\/\/egrowonline.com\/?p=59768"},"modified":"2023-09-04T20:30:30","modified_gmt":"2023-09-04T20:30:30","slug":"failure-to-tax-the-metaverse-will-create-a-tax-haven-harvard-legal-expert","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=59768","title":{"rendered":"Failure to tax the metaverse \u2018will create a tax haven\u2019 \u2014 Harvard legal expert"},"content":{"rendered":"


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Harvard legal scholar and Yeshiva University law professor Christine Kim recently published a research paper detailing arguments for not only taxing the metaverse but treating it as \u201ca laboratory for experimenting with cutting-edge policy.\u201d<\/p>\n

In the paper, dubbed simply \u201cTaxing the Metaverse,\u201d Kim argues<\/a> that the metaverse allows participants to create and build wealth entirely within its ecosystem.<\/p>\n

According to Kim, this burgeoning wealth sector should be regulated under tax code:<\/p>\n

\u201cBecause economic activity within the Metaverse satisfies the Haig-Simons and Glenshaw Glass definitions of income, its exclusion will create a tax haven.\u201d<\/p><\/blockquote>\n

The paper continues to explain that the metaverse\u2019s ability to \u201crecord all digital activity and track individual wealth\u201d means that governments can track and tax income immediately upon receipt \u2014 something Kim says could shake up the status quo when it comes to United States tax law. <\/p>\n

Related: <\/em><\/strong>New tax rules for crypto in the US: Law Decoded<\/em><\/strong><\/a><\/p>\n

Kim further recommends changes to how taxes are realized. In this context, metaverse users in the U.S. would, according to the research, currently be taxed only upon realization or engaging in a taxable event such as a withdrawal. <\/p>\n

Under Kim\u2019s proposals, taxation would occur immediately upon receiving gains, \u201cincluding unrealized gains and income,\u201d even if they remain in the metaverse.\u00a0<\/p>\n

The more pressing matter, in such an event, would be enforcement. Kim writes that there are two plausible methods for enforcing tax law in the metaverse. The first would involve individual platforms withholding taxes on behalf of users. <\/p>\n

The second, which Kim calls less preferable, is referred to as residence taxation and would rely on platforms sending tax information to users who would then file and pay their own tax obligations. <\/p>\n