Future digital money: The legal status and regulation of bitcoin in Australia

Virtual and digital crypto-currencies, specifically Bitcoin, were developed by an anonymous pseudonym ‘Satoshi Nakamoto’ in 2009 and have become a developing form of payment system used by businesses and consumers. Unlike traditional payment systems, Bitcoin is a peer-to-peer network with unique characteristics. Bitcoin is a private, anonymous and decentralised network that is intended to work independently from a government or banking authority. Bitcoin is therefore a network dependent upon mathematical algorithms between two users and managed through a process called ‘mining’, which is then stored within a user’s private ‘wallet’. This innovative technology offers numerous opportunities as a payment system; however, the legal challenges and risks it creates can be detrimental to consumers and businesses that use Bitcoin as an alternative payment system. The legal challenges of Bitcoin cause uncertainty for governments, businesses and consumers on the treatment of Bitcoin as an acceptable means of payment in Australia. Therefore, the purpose of this thesis is to determine whether Bitcoin is a form of ‘money’ and as such ought to be accepted as legal tender by the Australian Government under specific legislative instruments. Furthermore, this thesis will examine how Bitcoin is used to facilitate money laundering activities. Moreover, this thesis considers the treatment of tax within Bitcoin transactions and how unregulated Bitcoin transactions can be used to avoid tax. In addressing these legal issues and concerns, consideration is given to the possible regulation of virtual and digital currencies like Bitcoin in Australia. This thesis considers Australian banking, money laundering and taxation legislation and examines whether these regulatory frameworks are suitable to include Bitcoin as a payment system in order to limit money laundering and tax evasion activities within Bitcoin payment systems. Additionally, this thesis examines regulatory approaches to virtual and digital currencies in foreign jurisdictions, namely the United States, Canada and the European Union in order to gain some insight into how other countries are regulating Bitcoin as a payment system. This thesis arrives at a number of conclusions relevant to the possible regulation of Bitcoin in Australia. Firstly, it identifies Bitcoin as money and a form of payment system, but not legal tender and therefore not an accepted legal currency in Australia, which considers self-regulation of Bitcoin as a payment system a possibility. Secondly, it recognises that existing money laundering legislation can be amended to include Bitcoin as a payment system through which money laundering can take place and where Bitcoin exchange platforms are required to implement a ‘know-your-customer’ policy or ‘know-your-user’ policy. Thirdly, this thesis identifies that Bitcoin is recognised as a commodity for tax purposes and that suitable guidelines can be introduced on how to deal with tax activities and tax evasion within Bitcoin payments. Lastly, it is also recommended that international organisations such the Financial Action Task Force and International Monetary Fund could provide clarity on the treatment of virtual and digital currencies, specifically Bitcoin, as a payment system and legal currency, given that Bitcoin in global and borderless. Therefore, this research contributes towards how the Bitcoin network operates, its legal challenges and regulation in order to further research in this area of law

Inter-agency Cooperation and Good Tax Governance in Africa

In 2015, the Vienna University of Economics and Business (WU) and the African Tax Institute at the University of Pretoria launched a project to identify the links between corruption, money laundering and tax crimes in Africa. The project promotes the concepts of good tax governance and the importance to economic development of a tax system that is transparent and free of corruption. The project explores how law enforcement agencies and tax authorities can best cooperate to counter corruption and bribery. The project was initially aimed at three focus countries, namely, Ghana, Nigeria and South Africa, but soon was extended to other African countries. This is a joint initiative with the United Nations Office on Drugs and Crime (UNODC) and is also supported by the World Bank. This book brings together a series of background papers prepared for the Conference on Inter-Agency Co-operation and Good Tax Governance in Africa held at the University of Pretoria in July 2016. After a rigorous double peer-review process, the papers were revised by the authors. We express our gratitude to and acknowledge the services of the following peer reviewers: Tom Balco; Carika Fritz; Leon Gerber; Willem Jacobs; Benjamin Kujinga; Thabo Legwaila; Annet Oguttu; Dirk Scholtz; David Solomon; and Xeniya Yeroshenko. Finally, we express our sincere gratitude to all the research and administrative assistants who contributed to the Good Tax Governance in Africa Project. This book pays tribute to their efforts. Jeffrey Owens, Rick McDonell, Riël Franzsen and Jude Amos (Vienna and Pretoria, November 2017

International Trade and Capital Flight From Africa: Challenges for Governance

Capital flight constitutes a major constraint to Africa’s efforts to fill the large and growing financing gaps that hold back its progress towards achieving sustainable development goals. The mounting evidence on the unrecorded outflows of capital from Africa has spurred calls for strategies to curb the financial hemorrhage that is afflicting the continent. The existing evidence is still inadequate, however, on four fronts. First, the quantitative evidence is predominantly aggregate and does not furnish adequate country-specific information on the mechanisms of capital flight, its institutional contexts, and the role of domestic and foreign players in facilitating it. Second, the literature has not paid adequate attention to the destinations of wealth accumulated through capital flight and the roles of the banking sector and public institutions in destination jurisdictions. Third, much of the literature conflates the capital flight with the broader concept of illicit financial flows. While all capital flight is illicit owing to its unrecorded transfer – and often, as well, by virtue of the illegal origins of the wealth, and the failure to declare the assets and pay tax on the associated income – not all illicit financial flows are capital flight; for example, payments for smuggled imports are an illicit flow but distinct from capital flight. Fourth, the existing literature has not sufficiently explored the two-way relationship between capital flight and governance in national and international institutions. To help fill these gaps in the literature, the African Development Policy Program at the Political Economy Research Institute has initiated detailed analyses in a project generously supported by the Open Society Foundations and the Friedrich Ebert Foundation. This Working Paper series presents the project’s outputs. Our goal in issuing these reports is to engender informed public participation in decision making on financial regulation. Key findings will be distilled and published in the coming year in an edited volume that is forthcoming from Oxford University Press

Consumption Taxation in a Digital World: A Primer

The paper reviews the economic and administrative issues that arise in the taxation of electronic commerce; addresses how best to meet the criteria of an ideal tax system; and examines recent policy developments.It is argued that destination-based taxation-is presently the norm for goods taxation is technically more complex for digital products and intangible services sold over the Internet, reflecting the difficulty of determining the location of the buyer and seller.Most of the potential solutions to this problem require a great deal of administrative cooperation between national tax authorities.Case studies of several countries show that policy responses to electronic commerce have di.ered, with the European Union taking the lead on implementing a system of destination-based registration.Destination principle;international consumption taxation;electronic commerce;origin taxation;cross-border trade

The ongoing fight against tax avoidance in the perspective of the EU legal system: from ATAD I to the proposal for an "Unshell Directive"

openThe purpose of the thesis is to go deep into the EU anti-tax avoidance legislation's formation process, from ATAD I to the proposal for ATAD III. The first chapter provides an overview of EU tax avoidance situation, highlighting the huge problem of the tax compliance gap, its implications, and the future steps in the EU Agenda to oppose the problem. In the second chapter is presented an historical excursus of EUCJ case law, starting from the concept of abus de droit, passing through the introduction of the first anti-avoidance measures in the directives and ending with an explanation of the main measures introduced by ATAD I and II. This chapter faces up also the concept of shell entity. Then, are identified the main indicators that could be implemented to quantify the number of existent letterbox companies, and the countries in which the phenomenon is more widespread. Furthermore, it is provided an analysis of the red flags that commonly characterized no-substance entities. Lastly, some MNEs' tax schemes are investigated as real examples of aggressive tax planning accomplished with the establishment of shell entities in European Tax Heaven. The third chapter introduces the scope and the contents of Unshell Directive proposal, going deep into substance test’s steps, and sharing experts’ opinions and doubts. Moreover, are analysed the reactions and the possible future impact of ATAD III in Luxembourg and Netherlands. To conclude, are provided some insights and final observations.The purpose of the thesis is to go deep into the EU anti-tax avoidance legislation's formation process, from ATAD I to the proposal for ATAD III. The first chapter provides an overview of EU tax avoidance situation, highlighting the huge problem of the tax compliance gap, its implications, and the future steps in the EU Agenda to oppose the problem. In the second chapter is presented an historical excursus of EUCJ case law, starting from the concept of abus de droit, passing through the introduction of the first anti-avoidance measures in the directives and ending with an explanation of the main measures introduced by ATAD I and II. This chapter faces up also the concept of shell entity. Then, are identified the main indicators that could be implemented to quantify the number of existent letterbox companies, and the countries in which the phenomenon is more widespread. Furthermore, it is provided an analysis of the red flags that commonly characterized no-substance entities. Lastly, some MNEs' tax schemes are investigated as real examples of aggressive tax planning accomplished with the establishment of shell entities in European Tax Heaven. The third chapter introduces the scope and the contents of Unshell Directive proposal, going deep into substance test’s steps, and sharing experts’ opinions and doubts. Moreover, are analysed the reactions and the possible future impact of ATAD III in Luxembourg and Netherlands. To conclude, are provided some insights and final observations

Gambling on the Blockchain: How the Unlawful Internet Gambling Enforcement Act Has Opened the Door for Offshore Crypto Casinos

Online cryptocurrency casinos have seen a dramatic rise in popularity over the past thirty years as the rate of ownership of cryptocurrencies has risen almost as quickly as the US monetary value of a single Bitcoin. Current US laws and regulations are outdated; the only piece of federal legislation that provides oversight in the area of virtual gambling originated in 2006, more than fifteen years before the publication of this Note. Previous scholarship suggests that a lack of federal action has resulted in a surge of criminal activity, such as money laundering and tax evasion, as well as significant missed opportunities now that cash-strapped states are seeking to fill falling tax revenues in the aftermath of the COVID-19 pandemic. This Note expands on these arguments and offers a real and tangible solution that provides clarity to innocent gamblers and puts organized crime syndicates on notice. Since federal and state legislatures in the United States have failed to address the use of cryptocurrencies as a gambling medium, this Note illustrates why leaving the virtual gambling space largely unregulated is a net-negative for American society. By exploring this gap in the law, this Note aims to inform both federal and state legislators about the importance of governmental oversight in cryptocurrency gambling

Critical linkages: Transnational living and prospects for private senders of money from Britain to Ghana and Nigeria

The discourse on remittance flows has been predominantly financialised, focusing on their development impacts, securitisation in financial markets, and as risks to global financial systems through money laundering, terrorist financing and tax evasion. This has resulted in neglect of senders' perspectives and voices, even though senders bear the financial and human costs of remittances. This is a complex social phenomenon. Adopting bricolage using a mixed methods approach, based on the experiences of Ghanaian and Nigerian senders living in Britain, this study draws on conceptual frameworks of transnationalism, financialisation and wellbeing, and critical theory, to examine the financialisation of remittances, senders' transnational living and livelihoods, and well-being. The research findings are based on reviews of academic and policy literature from transnationalism, social policy and behavioural finance, synthesised with empirical data gathered from a group interview, quantitative survey and in-depth interviews of Ghanaian and Nigerian senders based in Britain. There are five main research findings: participating senders are not only migrant workers, but include British citizens; remittances constitute transnational social protection finance; efforts made by senders through transnational living strategies, sacrifice, and efforts to make recipients feel cared about, are understood as emotional labour; the policy and regulatory environment represents financialisation from 'above'. By highlighting senders' perspectives on remittance sending as a practice that has socio-cultural meanings, where money plays a role in mediating and shaping the dynamic family relationships underpinning the 'surface' financial transaction, the study additionally illuminates ways in which transnational family relationships can become financialised. Through understanding remittances as transnational social protection, and its sending practices as emotional labour and emotion in finance, the study contributes new data, methods, and concepts, drawing together multiple subject disciplines including social policy, international development, and behavioural finance that have traditionally been studied separately, demonstrating areas where they intersect and enrich each other

Unwanted entailments of the current EU AML/CFT regime

Dissertation presented as the partial requirement for obtaining a Master's degree in Law and Financial MarketsA presente tese visa investigar, de forma pragmática, a batalha contra o financiamento do terrorismo e o branqueamento de capitais no contexto do quadro europeu existente, bem como algumas das suas repercussões indesejadas. Para atingir esse objetivo, foi dada uma elucidação abrangente de todo o processo. A investigação, a acusação e a punição de todas as formas de enriquecimento ilícito estão atualmente em voga, bem como, sem dúvida, o financiamento do terrorismo. A monitorização das transações recebeu uma ênfase especial porque é a génese de alertas automatizados de atividades invulgares, dentro de um esquema complexo de relatórios. Foi utilizada uma abordagem técnica do instrumento, especialmente para ilustrar os custos de contingência e prudenciais esperados das instituições financeiras. Os determinantes dos fatores de risco num dado contexto também estavam sob escrutínio, bem como a necessidade de transparência num dado sistema. A tese também elucidou a incongruência de questões de aparente interesse público, nomeadamente a prevenção do branqueamento de capitais e financiamento do terrorismo e as suas reflexões negativas na proteção do consumidor e na integração financeira.The current thesis aimed to pragmatically investigate the battle against terrorism financing and money laundering in the context of the existing European framework, as well as some of its unintended repercussions. To achieve that goal, a comprehensive elucidation of the whole process was given. Investigation, prosecution, and punishment of all forms of illicit enrichment are currently in vogue., as well as, undoubtedly, the financing of terrorism. Transaction monitoring was given a special emphasis because it is the genesis of automated alerts of unusual activities, within a complex reporting scheme. A technical approach of the tool was utilized, especially to illustrate the contingency and prudential costs expected of financial institutions. The determinants of risk factors in given context were also under scrutiny, so was the need for transparency in given system. The thesis also elucidated the incongruity of two seemly public interest matters ML-FT prevention and its negative reflections in consumer protection and financial integration

The Analysis of Indonesian Electronic Transaction Tax (ETT) Under WTO Law

The existing international tax system, which is regulated by two fundamental principles—source- and residence-based principle, is no longer adequate for regulating corporate and digital service taxation. Act No. 2 of 2020 provides a legal basis for the imposition of Electronic Transaction Tax (ETT) on electronic commerce conducted by foreign merchants, foreign service providers, and/or foreign trade, which meet the provisions of having a significant economic presence such as Google, Amazon, Facebook, and Apple (GAFA). With the unilateral measure by Indonesia, it can be considered as having created a new tax policy outside the tax treaty and becoming an issue of a trade war between countries. Regarding Indonesia's GATS obligations, there is potential for an ETT to violate the obligations of national treatment and MFN. However, such tax can be justified under available exceptions in GATS if Indonesia conducts certain legal adjustments on ETT design