The Impacts of the Metaverse Economy on Taxation: A Discussion by EY

Host Susannah Streeter is joined by 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, to discuss the tax challenges of the metaverse. This emerging virtual world allows users to create, buy, and sell goods and services, socialize, and work.

The metaverse economy, which is built on blockchain technologies like cryptocurrencies, NFTs, and smart contracts, is projected to surpass $1 trillion in revenue by 2025. Organizations and governments need to quickly determine how to tax economic activities within this virtual world.

While existing legislation may be adapted for some aspects of the metaverse, new laws will likely be necessary to provide clarity and confidence for companies investing in this space. Navigating the international tax landscape for digital assets will continue to pose challenges.

EY’s panel of experts in this podcast explores various tax mitigation models for companies and the potential role of international institutions in simplifying metaverse tax regulations.

Key takeaways:

Despite skepticism, significant technological advancements are occurring in the metaverse and web3 space, with NFTs, cryptocurrencies, and smart contracts gaining traction. Tax teams must stay informed and adapt to these changes. There is a growing expectation that the metaverse will be a part of daily life in the near future.

To ensure the success of the metaverse economy, collaboration between companies, governments, and regulatory bodies is essential in reducing uncertainty and complexity in tax laws and regulations.

For your convenience, the full transcript of this podcast is available.