European Lawmakers Urge for Crypto Taxation and Blockchain Use

European Lawmakers Urge for Crypto Taxation and Blockchain Use

Members of the European Parliament have called for "effective taxation" of crypto assets and the "use of blockchain" to counter tax evasion. A resolution to achieve both objectives has been approved by a large majority, which also wants small crypto traders to adopt a simple tax system.

The European Parliament Adopts Framework for Uniform Taxation

European lawmakers have supported a resolution to adopt a framework seeking to achieve the implementation of blockchain technology in taxation and uniformly tax digital assets across the 27-strong bloc.

The document, drafted by Lídia Pereira from the conservative Group of the European People’s Party, was adopted on Tuesday with 566 votes in favor, while only seven members of the European Parliament voted against it and 47 abstained.

The resolution calls for fair, transparent, and effective taxation of crypto assets. It also suggests that authorities in the European Union should consider introducing a simplified tax structure for occasional or small traders and transactions.

The authors are calling on the European Commission, the executive body in Brussels, to first assess how the EU nations are currently taxing cryptocurrencies and identify the different national policies in the fight against tax evasion through these assets.

The resolution further insists on adopting a broadly accepted definition of crypto assets and a coherent definition of what would constitute a taxable event. This might be the conversion of crypto into a fiat currency, as per the text.

The cross-border nature of crypto trading makes it important to know where the taxable event would have taken place, the resolution notes, as quoted by the EU Parliament’s press service. It suggests adding crypto assets to the directive governing administrative cooperation on taxation matters, part of the Union’s framework for the exchange of information.

The resolution advises national administrations to use all available instruments to facilitate efficient tax collection and points to the blockchain as one of the tools. The technology could help to automate tax collection, limit corruption, and identify ownership of tangible and intangible assets.

The resolution follows the earlier approvals this year of the key institutions in the European Union’s legislative process—the Parliament, Commission, and Council—who agreed on a sweeping proposal to regulate the crypto sector in the bloc. The Markets in Crypto Assets (MiCA) legislative framework is expected to introduce licensing for crypto companies and ensure safeguards for their customers.