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Blockpit, an Austrian compliance expert and developer of software solutions for digital assets, has acquired its biggest competitor, the German startup CryptoTax. Both regtech companies provide tax software for cryptocurrencies.
European proficients in cryptocurrency tax reporting decided to combine their brains in order to enter markets in the United States and Canada. Austria-based crypto compliance expert, Blockpit, finally realized its partnership with German adversary CryptoTax, the company confirmed on September 8.
Both companies are concentrated on providing crypto tax reporting tools and they both decided to work together in order to widen their expertise to global jurisdictions as are the United States, Canada, Australia and the United Kingdom next year.
Right now both companies are functioning on territories of Germany, Austria and Switzerland. Blockpit’s representatives said that Blockpit and CryptoTax also intend to spread their European presence with the mentioned merger.
Blockpit to Become International Player with CryptoTax Acquisition
Co-founder and managing director at CryptoTax Klaus Himmer stated that the new merger actually makes it possible for both firms to become international players.
“The medium-term goal is to combine both companies to a renowned global player as well as an intensive expansion into the U.S. market.”
Blockpit’s officials said that the merger will not in any way impact existing customers of both firms as both Blockpit and CryptoTax will keep their particular offices in Linz and Munich. The company’s managers stated that during the next few months, CryptoTax is expected to modernize and acclimate its frontend to the Blockpit interface.
Blockpit and CryptoTax’s joint attempt to expand their crypto tax reporting expertise comes only after the U.S.’ tax authority, the Internal Revenue Service, gave an update to crypto taxation rules. As per the IRS, crypto revenue earned from microtasks through crowdsourcing or similar platforms is now taxable as ordinary income.
Blockpit and CryptoTax will obviously go through much competition in the U.S. as there is plenty of local crypto tax-focused companies as are Missouri-based CryptoTrader.Tax and TokenTax.
“Tax Havens” Won’t be Here for Long
When speaking about the crypto taxation, let’s just say that only last year, the IRS disclosed they had a meeting with four other states in an effort to partner to fight cross-border tax evasion stemming from digital currency users. Coinspeaker has already written that a few weeks ago, in the U.S., the IRS released the draft 2020 tax form, with a crypto tax question smack in the middle of the front page.
Sovos Solutions principal Wendy Walker stated that tax agencies around the world are cracking down on crypto investors who attempt to avoid paying taxes or, because of murky guidance, fail to appropriately calculate their gains and losses.
Also, speaking about tax havens and other ways to escape from paying taxes that exist now, she said:
“Of course, anyone is free to move assets to a country that does not tax cryptocurrencies. But I expect that those ‘tax havens’ won’t be around for long – the G20 countries are currently developing global tax reporting requirements for crypto businesses which means that crypto investors will not be able to hide assets from their home country of taxation for too much longer.”
It seems that Austria just stopped being a “haven,” since it introduced the law. However, there are still countries that are members of the European Union that don’t consider cryptocurrencies as money so, therefore, still aren’t taxing them.