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Taxation of Blockchain Staking Rewards: Propositions Based on a Comparative Legal Analysis

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Database and Expert Systems Applications - DEXA 2022 Workshops (DEXA 2022)

Part of the book series: Communications in Computer and Information Science ((CCIS,volume 1633))

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Abstract

Blockchain technology is seen as an essential part of a decentralized society. Given the relatively high energy consumption of proof-of-work consensus algorithms, proof-of-stake blockchains are becoming increasingly popular to reach consensus on the current state of the blockchain. With proof-of-stake, a randomized process determines which node is allowed to validate the next block of transactions. In order to participate, coin holders must stake their coins and receive staking rewards in return. Yet, there still is high uncertainty around the taxation of these staking rewards. This analysis compares the taxation of staking rewards in Germany, Austria, and Switzerland and derives four propositions under the premise of reaching a higher degree of tax neutrality. The legal comparison illustrates the heterogeneity in terms of taxing staking rewards. To achieve a more neutral taxation, (1) staking should only qualify as a business activity under clearly defined and restrictive circumstances. (2) Whenever staking does not represent a main business activity, staking rewards should not be taxed upon receipt. (3) Instead, they should be taxed upon disposal. (4) Moreover, staking should not cause further tax consequences for staked coins.

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Authors and Affiliations

  1. German University of Administrative Sciences Speyer, Freiherr-vom-Stein-Straße 2, 67346, Speyer, Germany

    Pascal René Marcel Kubin

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  1. Pascal René Marcel Kubin
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Correspondence to Pascal René Marcel Kubin .

Editor information

Editors and Affiliations

  1. Johannes Kepler University of Linz, Linz, Oberösterreich, Austria

    Gabriele Kotsis

  2. Technical University of Vienna, Vienna, Austria

    A Min Tjoa

  3. Johannes Kepler University of Linz, Linz, Austria

    Ismail Khalil

  4. Software Competence Center Hagenberg, Hagenberg, Austria

    Bernhard Moser

  5. (WU) Vienna University of Economics and Business, Vienna, Austria

    Alfred Taudes

  6. Johannes Kepler University of Linz, Linz, Austria

    Atif Mashkoor

  7. Johannes Kepler University of Linz, Linz, Austria

    Johannes Sametinger

  8. Software Competence Center Hagenberg, Hagenberg, Austria

    Jorge Martinez-Gil

  9. Software Competence Center Hagenberg, Hagenberg, Austria

    Florian Sobieczky

  10. Software Competence Center Hagenberg, Hagenberg, Austria

    Lukas Fischer

  11. Software Competence Center Hagenberg, Hagenberg, Austria

    Rudolf Ramler

  12. Pak-Austria Fachhochschule - Institute of Applied Sciences and Technology (PAF-IAST), Haripur, Pakistan

    Maqbool Khan

  13. Software Competence Center Hagenberg, Hagenberg, Austria

    Gerald Czech

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Kubin, P.R.M. (2022). Taxation of Blockchain Staking Rewards: Propositions Based on a Comparative Legal Analysis. In: Kotsis, G., et al. Database and Expert Systems Applications - DEXA 2022 Workshops. DEXA 2022. Communications in Computer and Information Science, vol 1633. Springer, Cham. https://doi.org/10.1007/978-3-031-14343-4_28

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  • DOI: https://doi.org/10.1007/978-3-031-14343-4_28

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-14342-7

  • Online ISBN: 978-3-031-14343-4

  • eBook Packages: Computer ScienceComputer Science (R0)

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