Crypto taxation talks gain traction in the EU
Crypto taxation is climbing up on the European Union’s agenda as speakers in a Brussels tax symposium highlighted the need to crack down on tax avoidance in crypto. The European Commission plans to adopt a draft of new crypto tax proposals on Dec. 7, several sources confirmed to The Block.
“While digitalization creates new opportunities, it also exposes cracks in our tax systems,” said Valdis Dombrovskis, European Commissioner for trade. “We have already started to address these challenges.”
Dombrovskis pointed to the upcoming proposal from the European Commission’s new iteration of EU taxation guidelines “so that EU rules stay in line with evolving economies and include areas such as crypto assets.”
Policymakers plan to discuss new rules on crypto taxation over the course of 2023, with an eye towards enforcing them in 2026. The discussion will include whether to implement a single tax regime for crypto across the bloc. But the process will likely be slow; representatives from the EU’s 27 nations need to achieve unanimous agreement on tax decisions, as taxation is largely up to individual members.
The elimination of tax evasion using crypto is one of the recommendations made in the Commission’s report for economic challenges post-covid.
The EU Parliament is set to pass a comprehensive framework for regulating crypto, the Markets in Crypto-Assets legislation, in February. Additional provisions aimed at combating tax evasion and money laundering will have to fit into that framework.
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Author: Inbar Preiss