In this Tax Stories episode I speak with Niklas Schmidt who is a tax partner at WOLF THEISS law firm in Austria. The tax practice of WT has been in tier 1 by most of the directories. He is an author of various books, funder of WT Crypto Academy, one of Austria’s leading international tax lawyers, with a strong focus on technology and private clients. Has studied in Vienna, Munich, Barcelona and Oxford.
A way of looking into a person’s mind
Niklas not only studies Latin, but also Python programming. His aim is to read 52 books per year, 1984 by George Orwell being one of his favourites. We also spoke about audiobooks on Audible and other apps – that it may be faster to get through books, especially if one gets used to 1.5 or 1.75 playback speed.
3 books by Niklas on crypto
Niklas has written a book on crypto (in German), one on legal aspects of crypto assets and edited a book (nearly 800 pages) on taxation of crypto assets.
What helps in WT tax business
Niklas praised participation in IBA Tax Committee. But he really was thrilled to tell about WT Crypto Academy where more than 1000 lawyers have studied, from all over the world, where he covers topics like NFT, DAOs (LLC living on blockchain), Decentralised Finance (DeFi) – financial services based on smart contracts on blockchain without intermediaries,etc.
Hi, my name is Lia27
We also spoke at length on how AI is entering lives of businesses and consultants and how the future might look like. Niklas relates to a quote:
“You are not going to be replaced by AI, but by a human using AI.“
Nature of NFT for VAT purposes
For a longer time VAT world was puzzled over the nature of NFTs – how to qualify it.Niklas also doesn’t have an immediate answer, but he commented that NFT is just an entry on a blockchain, so it’s a digital good that is linked with some content, like an image or a piece of art, music, video, etc.
In Metaverse income from real estate could reach EUR 1bn
Bloomberg Tax reported that there was already a case in Germany saying that in Metaverse real estate rental income is taxable. And that income there related to real estate amounts to nearly 1/2bn in 2021 and that it should double in 2022. A virtual yacht was bought for EUR 600k.
What needs to be improved in the tax systems?
Simplification is the first word that comes to Niklas mind, especially for smaller companies and startups. These smaller and starting businesses should also enjoy smaller tax rates. And these all new technological advancements don’t need favourite tax regime, but clear rules.
New law for crypto business in the EU
In the EU a new regulation to be adopted in April 2023 will take some 18 months to get implemented. The Markets in Crypto-Assets Regulation, or MiCA, is based on the principle of passporting. That means you need just one licence for the single market of 27 countries, 450 million consumers, 23 million businesses. It will ensure that crypto-assets and crypto-asset service providers (like exchanges and wallet providers) are subject to regulation and supervision. Whereas on 8 December 2022, the European Commission proposed a new (DAC8) EU directive. Under the draft crypto-asset service providers will have to report to the tax authorities transactions made by EU clients.
