Digital Assets and Property Taxes: Comparative law challenges and Serbian perspective

Abstract

In contemporary societies, now commonly referred to as digital societies, digital assets are experiencing significant growth and are becoming an increasingly important component of economic activity. The emergence of new forms of value that exist exclusively in the digital environment has created a need for an appropriate legal and tax framework, resulting in the gradual inclusion of digital assets within the scope of an increasing number of taxes. This paper is limited to the analysis of the tax treatment of digital assets within the framework of property taxes in both static and dynamic terms. It aims to present the tax regime applicable to digital assets in domestic and comparative law, primarily from the perspective of net wealth taxes and inheritance and gift taxes, and to identify, through comparative law analysis, the key challenges faced by tax authorities when subjecting digital assets to property taxes. This is investigated primarily using the normative and comparative methods and, to some extent, the axiological and historical-legal methods. The results of the comparative law analysis showed that digital assets are included in the net wealth tax bases in countries that have retained such taxes, and that one of the key challenges in their taxation is determining their value. Given that the Serbian tax system does not impose a net wealth tax, the tax treatment of digital assets in the context of property taxation is relevant only within the framework of inheritance and gift taxes. However, the practical scope these taxes is limited, as tax exemptions apply to transfers to the closest relatives. The analysis indicates a need for further clarification of the rules governing the determination of the market value of digital assets for inheritance and gift tax purposes under Serbian tax law. The findings should, however, be considered in light of certain limitations, primarily arising from the focus on property taxes and the limited number of jurisdictions included in the comparative analysis.