Taxing cash payments can be challenging. The OECD document Technology tools to tackle tax evasion and tax fraud (2017) illustrates some countries’ experience to prohibit the use of cash payments above certain thresholds (France, Greece, Spain), or for certain economic activities such as those related to immovable property (Argentina, Austria, Italy) or to monitor ATM withdrawals (Finland) or the right for certain businesses to refuse payment in cash (Sweden).

Now addition to cash, digital currencies have emerged. Private digital currencies are commonly referred to as cryptocurrencies and emerged just over 10 years ago with the advent of Bitcoin. Cryptocurrencies have rapidly grown and today there are over 3,000 types worth approximately $1 trillion. The two most popular, Bitcoin and Ethereum, represent 60% and 15% of all value respectively. These and many others float in value relative to fiat currencies like the USD and Euro. They are generally used as investments rather than a means of exchange. The biggest tax challenge is that their pseudo-anonymous and decentralized nature presents challenges for income taxation. Third party reporting of transaction data is hindered by the fact most transactions are not run through a centralized exchange or broker but executed person to person across the network.