Members of the European Union parliament voted in favor of a non-binding resolution aimed at using blockchain to fight tax evasion and coordinate tax policy on cryptocurrencies.
In a note dated October 4, the European Parliament said that 566 members out of 705 voted in favor of the resolution originally drafted by deputy Lídia Pereira. According to the legislature, The resolution recommended that authorities in its 27 member states consider “simplified tax treatment” for cryptocurrency users involved in occasional or small transactions, and that national tax administrations use blockchain technology “to facilitate efficient tax collection.”
In the case of cryptocurrencies, the resolution asked the European Commission to assess whether the conversion of cryptocurrencies to fiat would constitute a taxable event depending on where the transaction took place, saying it was a “more suitable option”. In addition, it requests an administrative modification to improve the exchange of information regarding taxes on cryptocurrencies.
The resolution adds that member states of parliament could integrate blockchain solutions into tax programs:
“Blockchain’s unique features could 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.” […] Work must be done to identify the best practices for the use of technology to improve the analytical capacity of tax administrations.”
Policymakers in the European Union have made progress in regulating the cryptocurrency market through its Markets in Cryptoassets framework, or MiCA. The bill, first submitted to the European Commission in 2020 and adopted by the European Council in 2021, aims to create a consistent regulatory framework for cryptocurrencies among EU member states. Many expect the policies to take effect as early as 2024.
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