On Tuesday, the members of the European Parliament (EP) voted in support of a resolution on crypto taxation in the EU. Also, the resolution calls for a general framework for crypto taxation in the EU. Additionally, the EU will be exploring the usage of blockchain technology to automate the taxation process.
The EU’s Recent Resolution on Crypto Taxation
Lidia Pereira, a member of the parliament (MEP) from Portugal, drafted the recent resolution, dubbed “Impact of new technologies on taxation: cryptocurrency and blockchain.”
The resolution covers two significant areas. One is to examine the issue of crypto taxation in the EU. The second area is to evaluate how blockchain technology can help to simplify the entire process.
Therefore, the EP has mandated the European Commission (EC) to handle the first area. The commission will assess how EU member countries are handling crypto. This will focus mainly on using crypto assets to evade taxation.
According to a recent press release, digital assets in the EU are subject to transparent, effective, and fair taxation. Meanwhile, this resolution also emphasizes the need for transparency and collaboration between nations to regulate and tax digital assets.
Furthermore, the document asks the appropriate entities to identify what events are taxable. It also calls for simplified rules for occasional and small crypto traders.
A significant aspect of simplification involves using blockchain technology to conduct crypto taxation. However, the document added that work is needed to help identify how best to use such technology.
Most entities believe blockchain technology can improve tax administrations in the EU. In addition, the resolution asked the EC to integrate blockchain tech into the tax process and system.
Finally, member countries will have to reform their tax entities. This will involve integrating blockchain technology to help simplify their operations.
EU’s Roadmap to Crypto Regulation
The EU has been working towards regulating the crypto sector this year. The EU’s effort aims to ensure a uniform crypto regulation for all EU member states.
However, this effort often met various privacy concerns. These privacy concerns emerged as proposed legislation focused on fighting tax evasion and money laundering.
In April, the EP released a bill to track cryptocurrency transactions. This bill aims to combat the issue of money laundering in Europe using cryptocurrencies.
Additionally, the EU published a report recently detailing forthcoming modifications to legislation titled 2015/847. The changes focus on imposing restrictions on services like cryptocurrency mixers.
Meanwhile, the bill ignited concerns within the body. Several entities raised questions concerning the future of anonymity in the EU.
Crypto Adoption in the EU
Recently, the US sanctioned the crypto mixer Tornado Cash after alleging that many hackers used the platform for money laundering. The Netherlands, an EU member state, played a major part in arresting the developer behind the crypto mixer.
Meanwhile, most of the crypto regulatory efforts in Europe have been pointing towards stringent supervision of the sector. However, the crypto industry has been striving in the continent.
Research published last year revealed that “Europe’s whales” controlled one-quarter of all cryptocurrency transactions around the globe.
Recently, a US-based crypto exchange emerged as the first to gain regulatory approval in the Netherlands. Over time, more crypto exchanges would likely receive regulatory approval in the country and the region.