Crypto taxes: a boon for Europe?

2.4 billion euros is the sum that the EU could raise if an adequate tax system were put in place. Sensitive information that would have leaked from high authorities while the European Commission plans the imminent publication of its new tax directive supposed to fill the ” regulatory vacuum for cryptocurrency users.

Cryptocurrencies to bail out EU coffers?

On Tuesday, December 6, The Block reported the document leak stating that the European Commission would be ready to tax cryptocurrencies. The crypto newspaper mentioned a colossal sum that the EU would prepare to accumulate in the event of the success of its proposal, 2.4 billion euros (or 2.5 billion dollars).

To do this, the EU will have to require crypto service providers to report to the tax authorities of each nation.

The project in question will apply to:

  • crypto-assets issued in a decentralized manner;
  • to stablecoins;
  • and some NFTs.

Also, the recognition of crypto assets as a means of payment or investment is one of the sine qua non conditions for the success of this project. It is still necessary to define the taxable event on the cryptocurrency market. And at the same time, target service providers in the directive due out this week.

“Regulatory vacuum” in Europe, towards a directive or a regulation?

The work currently carried out by the European Commission boils down to a simple directive and not a regulation. Brussels, which would aspire to establish a single tax regime for the cryptocurrency market, however, must wait. The said directive would in fact grant more freedom of decision to each Member State concerning questions of taxation.

In the absence of a harmonized tax policy, the EU will have to content itself with issuing directives on the declaration of citizens’ income.

In addition, the EU is obliged to align itself with the standards in force in terms of taxation of cryptocurrencies. In particular, it is difficult for him to avoid the provisions contained in the report of the Organization for Economic Co-operation and Development. This was published last October. Certainly, cryptocurrencies represent a real boon for Europe, but it will be necessary to wait for the application of the rules in 2025 or 2026 to collect the least penny in its coffers.

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