Podcast host Susannah Streeter welcomes Dennis Post, Global Leader of Blockchain Tax Services at EY Belastingadviseurs LLP in the Netherlands, David Wren, Tax Associate Partner at Ernst & Young LLP in the UK and Mercy Joseph, Director of Tax Services at EY Corporate Advisors Pte Ltd in Singapore. Together they discuss the tax challenges surrounding the metaverse – an emerging virtual world, where users will create, buy and sell goods and services, socialize, and even work.
Some analysts predict the metaverse economy, which is being built on blockchain-based enabler technologies such as cryptocurrencies, NFTs and smart contracts, will generate revenues exceeding $1 trillion by 2025.
The timescales are short, so organizations and governments alike must figure out how economic activity in this exciting virtual world should be taxed.
Some existing legislation which already covers e-commerce may be adapted, but in other areas new laws will be required to frame public policy and give companies active in this space the confidence they need to invest.
In the meantime, organizations must navigate a complex international tax landscape where jurisdictions routinely apply contrasting tax treatments to digital assets.
In this podcast, EY’s panel of thought leaders discuss the models companies can adopt to mitigate ambiguity and manage tax risk. They also consider the role that international institutions could adopt in an attempt to simplify the metaverse tax landscape.
Key takeaways:
- However skeptical some individuals may feel about the metaverse and web3, real change is happening right now. Foundational technologies are converging, NFTs are being issued, cryptocurrencies are being developed, innovative smart contracts are being created and taxable events are taking place. Tax teams must keep pace with developments.
- There is a growing expectation that individuals will be using the metaverse daily within just five years.
- To ensure the metaverse economy is a success, companies and governments must ensure tax, law and regulation work together to reduce high levels of uncertainty and complexity.
For your convenience, the full text transcript of this podcast is also available.
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