Members of parliament call for “effective taxation” of crypto assets and “better use of blockchain” to tackle tax evasion. A majority passed a resolution to achieve both goals, and we also hope to allow more direct taxation for smaller cryptocurrency traders.
European Parliament Adopts Framework for Uniform Taxation of Cryptocurrencies in EU
Members of parliament in Europe have endorsed a non-binding resolution. They have set a framework aimed at achieving the implementation of blockchain technology in taxation. This will tax digital assets across 27 powerful blocks.
Lydia Pereira wrote the document of the European People’s Party’s conservative group. It was adopted on Tuesday with 566 votes in favor, seven MPs voting against, and 47 abstentions.
The resolution states that crypto assets must be subject to fair, transparent, and effective taxation. It has been suggested that European Union authorities should consider introducing a simplified tax regime for temporary or small traders and transactions.
Authors urge the European Commission, the executive body in Brussels, to first assess how EU countries currently tax cryptocurrencies. This includes identifying various national strategies to combat tax evasion through these assets.
Adoption of a Commonly Accepted Definition of Crypto Assets
The resolution further calls for adopting a commonly accepted definition of crypto assets and a consistent definition of what is taxable. According to the text, this could be a virtual currency to fiat currency conversion.
The international nature of cryptocurrency trading makes it essential to know where a taxable event occurred. This is according to a resolution cited by the European Parliament press service. It proposes including crypto assets in the Directive on Administrative Cooperation on Taxation, which is part of her EU framework for information exchange.
The resolution advises governments to use all available tools to facilitate efficient tax collection. The technology could automate tax collection, curb corruption, and help identify owners of tangible and intangible assets. It will enable better taxation of mobile taxpayers, the documents said.
The non-binding resolution comes after the central bodies of the European Union’s legislative process, parliament, commissions, and councils agreed earlier this year on sweeping proposals to regulate the crypto space within the block.
The Markets in Crypto Assets (MiCA) legislative package will introduce licensing and customer protection for cryptocurrency companies. An agreement was also reached on anti-money laundering regulations related to cryptocurrency transactions.
Crypto Taxes Fall Under EU Lawmakers’ Gaze
After controversial legislation limiting the privacy of cryptocurrency transactions and even banning Bitcoin (BTC) outright, the European Parliament is now considering what blockchain technology means for tax.
On April 25, parliamentarians are set to discuss ways to strengthen tax laws and procedures for the Web 3 era. This includes drafting a report. Lídia Pereira of Portugal said national tax authorities want to see data on personal crypto holdings. It suggests that you may start editing your share.
Existing European Union Administrative Cooperation Regulations allow similar exchanges of bank account information to prevent foreign holdings from being kept secret from tax authorities. The economic cooperation will act as a guardian of international tax standards. The Organization for Development (OECD) is currently considering the idea.