The Louise Weiss building, official seat of the European Parliament, Strasbourg, France, 13 September 2019. olrat/Shutterstock
The European Parliament has voted in favor of a non-binding resolution that tries to tackle both tax evasion using crypto and streamline rules for crypto taxation, the institution said in a press release on 4 October.
According to the announcement, the resolution passed the Parliament’s plenary session with an overwhelming majority — with 566 out of 705 members voting in favor — setting up a framework to help the 27 member states “coordinate more” on tax policies for cryptocurrencies. One of the main points of the resolution is that crypto assets must be subject to “fair, transparent and effective taxation”.
To achieve this, the European Parliament now recommends that authorities in its member states consider a “simplified tax treatment” for crypto users involved in small or occasional transactions. The resolution also tries to identify the most appropriate taxable event in crypto, and calls on the European Commission to assess whether crypto-to-fiat conversion is the most viable option.
The cross-border nature of crypto makes it important to know where a taxable event has taken place, and so the resolution asks for an administrative amendment so crypto asset information is included when exchanging taxpayer information between nations. The resolution also pushes forward the use of blockchain technology, advising member states it will be beneficial to integrate blockchain solutions into their tax collection programs. The press release reads:
“Blockchain’s unique features could offer a new way to automate tax collection, limit corruption and better identify ownership of tangible and intangible assets allowing for better taxing mobile taxpayers.”