A non-binding resolution laying out a framework to utilize blockchain technology in taxation and uniformly tax digital assets across the 27-member EU has received approval from European legislators.
Only seven members of the European Parliament voted against it, and 47 abstained, as the document, which was authored by Lidia Pereira of the conservative Group of the European People’s Party, was approved on Tuesday. The resolution states that fair, transparent, and efficient taxation must apply to crypto assets. At the same time, it advises European Union officials to take into account implementing a streamlined tax approach for sporadic or small traders and transactions.
The authors are requesting that the European Commission, which is the executive body in Brussels, first evaluate how the EU countries are now taxing cryptocurrencies and identify the various national strategies in the struggle against tax evasion using these assets. The resolution also calls for the adoption of a uniform definition of cryptocurrency assets and a clear explanation of what would qualify as a taxable event. According to the wording, this might be the transformation of a cryptocurrency into a fiat currency.
According to the resolution, which was cited by the press office of the EU Parliament, it is crucial to identify where the taxable event would have occurred given the cross-border nature of cryptocurrency trade. The directive controlling administrative cooperation on tax concerns, which is a component of the Union’s framework for information exchange, is suggested to include crypto assets.
Blockchain is mentioned in the resolution as one of the methods that national administrations should use to enhance effective tax collection. The document claims that the technology might aid in automating tax collection, reducing corruption, and identifying ownership of tangible and intangible assets, enabling better taxation of mobile taxpayers.
The non-binding resolution was passed after the Parliament, Commission, and Council—the three major legislative bodies of the European Union—agreed earlier this year on a comprehensive proposal to regulate the crypto industry within the Union. It is anticipated that the Markets in Crypto Assets (MiCA) legislative package will bring licensing for cryptocurrency businesses and protections for its clients. The anti-money laundering guidelines for bitcoin transactions were also agreed upon.