According to European officials, the European Commission is ready to discuss with member countries the adoption of a common tax system for crypto assets. The talks with national treasuries are expected to start next year with the aim to end the differentiated tax treatment of cryptocurrencies across the bloc’s 27 jurisdictions.
European Union to Consider Single-Tax Regime for Crypto Income and Crypto Profits
According to Politico, the European Commission, Brussels’ executive body, will soon start talks with the financial ministers of member states about whether a Union-wide tax regime on crypto is appropriate. This was a quote from three EU officials.
According to sources, the discussions will begin in 2023. The discussions will focus on sharing best practice as cryptocurrency wealth is subject to different taxes within each country. A spokesperson for Commission spoke out to clarify the matter.
Tax administrations are faced with challenges in classifying, valuing, and administering crypto assets.
However, before implementing a single, tax-based tax system, the European Union should introduce new requirements to crypto companies in order to collect information about digital asset owners, both individuals as well as businesses, and then share it with tax authorities across Europe, the report states.
This would give tax authorities a clear picture of crypto holdings. These regulations are expected to be proposed by the European Commission in December or January. However, enforcement is expected to begin in 2026. This will allow the European Commission to impose the cryptotax the next year.
European institutions have been working to create a comprehensive legal framework for cryptocurrency called Markets in Crypto Assets, which was finally agreed upon this summer. Media reports blamed the delay in adopting it on the need to translate the complex legal document into all EU official languages. MiCA should be in force by 2024.
Politico reports that member states currently have different rules for taxing crypto income and capital gains. Rates range from zero to 33%. Some European countries are currently reviewing their policies in preparation for a decision at the EU level.
Portugal, for instance, has decided to levy a levy starting in 2023 on short-term crypto investments. Portugal was already exempt from taxing crypto trading gains unless they were part of a business activity. According to the budget for next years, traders who cash out crypto gains less than a year ago will be subject to a 28% tax.
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Commission, Crypto, Crypto assets, Cryptocurrencies and Cryptocurrency, discussions. EC, EU Commission. European Union member states. MiCA, talks. Tax, tax authorities. Tax regime, Taxation. Treasuries
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Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
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