Politicians in the EU vote for blockchain-related tax policy
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(Kitco News) – The European Parliament has voted in favor of a non-binding resolution that would include the use of blockchain technology to combat tax evasion and coordinate tax policy for cryptocurrencies.
According to a message released on Tuesday, 566 out of 705 members of the European Parliament voted in favor of the resolution, which appears to create a “simplified tax treatment” for crypto users who make occasional or small transactions. The bill also looks to incorporate blockchain technology into the national tax administration “to facilitate efficient tax collection.”
Two areas of clarification specifically highlighted by the resolution are for the European Commission to determine “a clear and widely accepted definition of crypto-assets”, and for a “coherent definition of what will constitute a taxable event.”
“The resolution suggests that converting a crypto-asset into a fiat currency may be the more appropriate choice, and it specifically asks the Commission to consider this option, along with a more general option regarding the identification of possible taxable events,” the announcement said. . “The cross-border nature of crypto-asset trading also makes it important to know where the taxable event would have taken place.”
The resolution also calls for the amendment of the directive on administrative cooperation on taxation to include crypto-assets in the framework for the exchange of information.
Regarding the use of blockchain technology for tax collection, the announcement highlighted the potential of blockchain to simplify the tax collection process and make it more efficient.
“Blockchain’s unique capabilities can offer a new way to automate tax collection, limit corruption, and better identify ownership of tangible and intangible assets, enabling better taxation of mobile taxpayers,” the resolution asserts.
The commission has been asked to identify the optimal way to integrate blockchain technology “to improve the analytical capacity of tax authorities.” The message also called on EU member states to reform their tax authorities through modernisation.
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