Bitcoin & Co.: Saxony uses AI to search for taxable transactions
Software developed in the federal state is intended to help Saxony's tax investigators uncover undeclared crypto transactions in tax returns.
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The Saxon Ministry of Finance wants to use special software to uncover money laundering and tax evasion in trading cryptocurrencies like Bitcoin. The state government announced this on Wednesday, explaining that the technology was developed as part of a cooperation between the State Office for Taxes and Finance and the Mittweida University of Applied Sciences. The new software will also be used with the help of AI technology when income from cryptocurrency is not declared in tax returns. In addition, further software will process transaction data from wallets and trading platforms to find tax-relevant transactions more quickly. This is intended to make audits more efficient.
Help for tax investigators
In connection with the presentation of the initiative, the state government now points out that trading in Bitcoin, Ethereum & Co. has “developed from a niche project into a multi-million euro market” in this country. However, anyone who sells cryptocurrency within a year of acquiring it must generally declare it in their tax return, as such income is subject to income tax. The software was developed precisely for cases where this does not happen. It is intended to uncover such undeclared income and help determine a fair tax.
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With the new tool, tax investigators will receive an “effective instrument for combating financial crime,” says Finance Minister Christian Piwarz (CDU). His ministry also points out that crypto service providers under an EU directive are obliged to transmit transaction data to tax authorities from 2027. This must be done for the first time for the reporting period 2026. The information will be exchanged between EU member states to uncover tax fraud. The minister sees all of this as a clear message that “tax evasion through trading in crypto assets is not worth it.” “Tax investigators will discover illegal activity anyway,” he is convinced.
(mho)
