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Brussels Starts Talks on EU Crypto Tax, Report Reveals – Taxes Bitcoin News
The European Commission is preparing to discuss with member states the adoption of a common tax regime for crypto assets, European officials have indicated. Talks with national treasuries are expected to start next year with the aim of ending the differentiated tax treatment of cryptocurrencies across the bloc’s 27 jurisdictions.
The European Union is considering a single tax regime for crypto income and profits
The executive body in Brussels, the European Commission, intends to soon start talks with the finance ministries of member states on whether it is justified to establish a union-wide tax regime for crypto, a report from Politico revealed on Thursday, citing three EU officials.
Discussions are due to begin in 2023, the sources told the publication. Their focus will be on sharing best practices, as cryptocurrency wealth is currently subject to different taxes in each country. Commenting on the initiative, a spokesperson for the commission elaborated:
Difficulties in classifying, valuing and managing crypto-assets pose challenges to tax authorities seeking to tax them fairly and efficiently.
However, before implementing a single tax regime, the EU must introduce new requirements for crypto companies to collect details of owners of digital assets, both individuals and businesses, and share them with tax authorities across the EU, the report said.
This will allow the tax authorities to have a clear idea of crypto holdings. The European Commission is expected to propose such regulations in December or January, but it will likely start enforcing them in 2026, which would allow it to impose the crypto tax the following year.
European institutions have been working on a comprehensive regulatory framework for cryptocurrencies called Markets in Crypto Assets (MiCA) that was agreed this summer. Media reports attributed a delay in the adoption to the need to translate the complex legal document into all official languages of the EU. MiCA will enter into force in 2024.
Currently, member states use different rules to tax income and capital gains from crypto, with rates varying between zero and 33%, Politico notes. Authorities in some European countries are revising policy ahead of a possible decision at EU level.
Portugal, for example, which did not tax gains from crypto trading, unless they are part of a business activity, now intends to impose a tax on profits from short-term crypto investments starting in 2023. Traders withdrawing any crypto gains made pursuant to a year will face a tax of 28%, according to next year’s budget.
Do you think the EU will eventually introduce a single tax regime for crypto assets? Share your expectations in the comments section below.
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