Members of the European Union Parliament Vote in Favor of a Crypto Tax Policy
- The European Union has moved forward with its plans to establish an EU-wide regulatory framework for cryptocurrencies.
- The Markets in Crypto-Assets framework (MiCA) seeks to establish a guideline for crypto regulation amongst member states.
- Despite concerns by crypto leaders, the EU announced that it had adopted an anti-money laundering law that would protect and guide crypto transactions.
Parliament members of the European Union reportedly supported a non-binding resolution promoting the use of blockchain to combat tax evasion and coordinate tax policies on cryptocurrencies. Parliament member Lidia Pereira originally drafted the resolution, but it received wide support from other members. A statement from the European Parliament said that 566 of its 705 members voted to support it.
The European legislative union noted that the resolution proposed that national tax administrations use blockchain technology to enable better tax collection and that authorities in its 27 member states recognize a simplified tax treatment for cryptocurrency users who engage in infrequent or small transactions.
The resolution urged the European Commission to evaluate and decide if converting cryptocurrencies to fiat would be a taxable event based on the location of the transaction. Furthermore, the proposal called for an administrative adjustment to improve information exchange about cryptocurrency taxation.
Explaining how blockchain can improve taxation among European state members, the resolution wrote,
Blockchain’s unique features could offer a new way to automate tax collection, limit corruption and better identify ownership of tangible and intangible assets allowing for better taxing mobile taxpayers. […] Work must be undertaken to identify the best practices of using technology to improve the analytical capacity of tax administrations.
Cryptocurrency has gained an increased presence in many European countries, and the European Union moved forward with its plans to regulate the industry with its Markets in Crypto-Assets framework (MiCA). The bill, which was originally presented to the European Commission in 2020 and later approved by the European Council in 2021, intends to establish an EU-wide regulatory framework for cryptocurrencies. The policies are anticipated to take effect before 2025.