European Parliament passes resolution on cryptocurrency taxation

European Parliament passes resolution on cryptocurrency taxation

The European Parliament has passed a non-binding resolution on using blockchain technology to fight tax evasion and coordinate taxation of cryptocurrencies.

According to the official press release of the European Parliament, published today, October 4th, 566 MPs out of 705 voted in favor of the adoption of Lidia Pereira’s resolution. According to the resolution, the 27 member states of the European Union (EU) recommend, among other things, “simplified taxation” for crypto users who only make a few small transactions. In addition, national tax authorities should use blockchain technology to “be able to act efficiently when collecting taxes”.

With regard to cryptocurrencies, the resolution calls on the European Commission to examine whether and in which cases switching from crypto to fiat alone should be taxed. In addition, the Commission is asked to encourage a closer exchange of information on the tax treatment of cryptocurrencies.

Furthermore, the resolution proposes that the parliaments of the respective member states use blockchain solutions for their crypto tax collection:

“Blockchain’s unique features could open up a new avenue for automated tax collection, while reducing the possibility of corruption and gaining a better overview of ownership of tangible and intangible assets. […] Efforts should be made to use the best possible technical solutions to optimize the tax authorities’ analytical capabilities.”

At another level, the European Union (EU) has already provided a lot of legal clarity about cryptocurrencies with its crypto regulation Markets in Crypto-Assets (MiCA). This is intended to create a legal framework that is as holistic and common as possible for the innovative asset class. The provisions contained therein are expected to come into force from 2024.

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