In a recent move, the European Parliament has shown overwhelming support for the introduction of a comprehensive tax-reporting rule tailored for cryptocurrency transactions. A staggering 90% of the participants voted in favour of the proposal, with 535 individuals supporting the motion, 57 opposing, and 60 abstaining. This rule is slated for implementation by 2026.
During a plenary session held on September 13 in Strasbourg, France, the European lawmakers expressed their strong endorsement for imposing tighter tax reporting obligations on cryptocurrency exchanges. The primary objective behind these rules is to empower tax authorities throughout Europe to effectively monitor crypto-asset trading and income, thereby minimizing the potential for tax fraud.
The European Commission had initially put forth this framework in December 2022. Once in effect, it will mandate crypto-asset service providers to disclose transactions conducted by their European clientele. This recent session marks a pivotal moment for the framework, being the third significant discussion on the topic. The Commission had previously outlined its overarching approach to the proposal during the Economic and Financial Affairs Council meeting in May.
In a bid to establish this crypto tax framework, the Commission is looking to amend the Directive on Administrative Cooperation (DAC). The DAC is the cornerstone platform enabling tax authorities to exchange data. The proposal also encompasses several minor tweaks to bolster the existing tax-related information-sharing mechanism.
This initiative aligns with the European Union’s ongoing deliberations concerning the regulation of crypto assets. Post a robust endorsement of cryptocurrency regulations within the European Union, the EU finance ministers greenlit the Markets in Crypto-Assets (MiCA) legislation on May 16. These regulations, primarily aimed at sealing tax evasion loopholes, were activated in July.
Furthermore, Europe celebrated the inauguration of its inaugural spot Bitcoin exchange-traded fund (ETF) on the Euronext Amsterdam stock exchange on August 16. Dubbed the Jacobi FT Wilshire Bitcoin ETF and bearing the ticker symbol BCOIN, it functions under the regulatory purview of the Guernsey Financial Services Commission.