While many refer to crypto as the “Wild West,” some believe that this may only continue for a little longer.

Thomas Shea, crypto tax leader at EY Financial Services, told Cointelegraph that taxation for crypto is an evolving area and new regulations may be implemented soon. “There is new legislation that will require reporting for at least some crypto transactions, and when those rules go into effect, there will be significant changes,” said Shea.

The EY executive noted that with the increased popularity of crypto, lawmakers are continuously exploring how to generate revenue by taxing and regulating digital assets.

“We’re seeing certain jurisdictions develop regimes, rates and reporting unique to digital assets. In the U.S., we’re seeing digital assets being subject to rules and reporting typically limited to securities (and not property).”

While may not appreciate their crypto assets being taxed, understanding the changing tax impacts associated with crypto is crucial according to Shea. The tax expert noted that market participants need to be aware of the “scope of their transactions that potentially trigger a taxable event and the associated reporting requirements.”

According to Shea, whether one buys or sells crypto influences whether it’s taxable or not. Purchasing crypto with fiat and any unrealized appreciation is not a taxable event. However, the tax executive noted that selling crypto is a taxable event. He explained that “The gain or loss is generally capital in nature” and that this could be taxed.

Even if a holder exchanges their crypto for other assets like Bitcoin 

BTC

$17,408

 or Ether 

ETH

$1,333

, the EY executive noted that users have a “taxable event and are required to report gain or loss on the disposed crypto.”

The same applies to nonfungible tokens. “If you purchased an NFT with fiat, no taxable event,” said Shea. However, purchasing NFTs with crypto is treated very similarly to a crypto-for-crypto exchange. “The gross proceeds less your tax basis in the asset, generally including any associated fees/costs,” said the crypto tax expert.

Shea also urged people to seek the counsel of proper advisers once they are aware of their tax obligations.

“In an industry in which technology serves as the architectural framework, having an adviser that has an accompanying technology solution and understands your goals will enable you to make the best decisions possible to minimize your tax burden.”

Related: How are cryptocurrency taxes reported?

Meanwhile, in Thailand, crypto traders are reportedly exempt from the 7% value-added tax on authorized exchanges. Traders within the country will also be able to offset losses against gains annually.

Back in February, the Indian government proposed a 30% income tax on crypto revenue. However, many opposed the proposal, as a 30% crypto tax is almost double that of corporate tax rates, which hover at 16%.