As CBDCs become more or less a norm, it would be possible for the blockchains to put on the taxation rules at the bridge or the exchanges where the FIAT conversion happens. In such case most of the govt's around the world are planning on adding the 30% taxation. I was wondering how it would be calculated? How it would be possible to add the tax to these type of the FIAT/Crypto pair transaction?

So here are some of my views on how this would be taken into the consideration.

Accountant Reference in the Exchange based Transactions

Most of the people withdraw from Binance, Coinbase, Houbi and other exchanges which are local or global selling and buying the crypto for FIAT. These exchanges could add some references which could be read by the tax softwares or the accountants to indicate the references of crypto transaction. Which makes it easy for them to tax you 30% or (whatever the amount) you have for the taxes.

Once this is done the calculation becomes pretty easy. As they already keep track of our banks and the other big transactions done online. And a lot of nations have this Annual information sheet where they automatically fetch such data. And then calculation becomes easier on that front. Which is painless to track and also transparent too.

Liberal Declaration

Most of the nations upto this point allowed the liberal declaration of the taxes. And that's why the hybrid model of cash and digital transactions worked out. However in near future everything becoming digital and crypto would make liberal declaration obsolete. Like you have hands off way to track your taxes as everything is digital and sometimes already pre deduction may happen. Which will talk about next later.

In case of Liberal declaration, we can see that people try to avoid taxes. And they try to evade by accepting the cash and the cheques where the money can be adjusted. Which is something you can't do in case of the exchange to FIAT method. Where you can't have the liberal declaration anymore. So this is where we are in current state which won't remain for long in near future.

Pre-Deduction of Taxes in Process

In this process, the exchanges and the IRS (income tax authority) would be checking the transaction and identifying the money earned through crypto to FIAT mode. Here the tax would be applied at the source and you would get pre-cut value of the transactions. So out of 100 USD you can get the cut of 30 percent and 70 USD would be in your hands. This process can happen with many nations as they want to avoid leak in the process.

This process may not happen in some nations or states where they want tax payers to have some control over transactions. Like say if they don't want such high taxation they can have the conversion done and store the funds in another currency pair as a Forex reserve. Something like this can happen on state level and the citizens. But we don't know if this type of the process would become norm all over the world.

These are my speculations on how the taxation happens in near future. I know I am not tax professional and the financial advisor. So anything here written is nothing but the speculation. I feel such speculation is necessary because often what we write here gets into the influence govt. picks up on the data and decide on their own.

That's just my 2 cents. What are your views on future taxation process?