Cryptocurrency tax proposed to fund EU budget

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Taxing capital gains, mining or cryptocurrency transactions are all ways to investigate funds the $185 billion in annual expenditures of theEuropean Union.

In fact, to finance the annual budget of the European Union of 170 billion euros, or 185 billion dollars, European parliamentarians have proposed to tax cryptocurrencies.

In a bill intended for the budget committee of parliament, published on January 16, several options are being considered. Among them are taxes on capital gains, on transactions or on mining.

That is what the French Members say Valerie Hayer and Portuguese José Manuel Fernandes, the report:

suggests the introduction of a European tax on cryptocurrencieswhose revenue would be paid into the European budget”.

Moreover, this legislative project explain that:

Regulate and tax cryptocurrencies on a European level is more effective than at national level given their high mobility and their cross-border dimension.”

Furthermore, last December the European Commissionthe EU’s executive body, has proposed new rules to allow detailed information about an investor’s cryptocurrency holdings to be exchanged between tax authorities.

However, decisions on the nature and amount of taxes remain with national governments. Other lawmakers on the committee have until February 2 propose amendments to this bill.

But in truth, the 705 legislators of the European Parliament have limited control over tax laws. These are usually approved unanimously by the 27 finance ministers of the bloc’s EU countries.

Fabio Panetta, member of the board of directors of the european central bank, has previously said that taxation could be used to address the environmental costs of cryptocurrency. These costs include proof-of-work technology that is very energy intensive and used mining bitcoin (BTC).

European lawmakers are also considering taxing corporate profits, carbon-intensive imports and financial transactions. Their goal is to finances the budget of theEuropean Unionwhich is now largely financed by national contributions and is earmarked for agricultural subsidies and regional investments.

The EU plan requires cryptocurrency and NFT platforms to disclose tax information

In addition, the account reviewed by CoinDesk also covers the stablecoins, derivativess and companies outside the European Union.

Indeed, under a bill expected to be introduced by the European Commission next week, cryptocurrency exchanges will have to report transaction data from their EU customers national tax authorities within the Union.

The new law, inspired by international standards designed to combat tax evasion related to cryptocurrencies, could also apply to stablecoins, derivatives and non-fungible tokens (NFTs). The bill shows that it could even be done cryptocurrency platforms located outside the European Union are required to register within it.
A draft of the document proposing the bill reviewed by CoinDesk states that:

“The obligation to declare the income from investments in cryptocurrency and the exchange of this information will help Member States to receive a full set of information to collect the tax revenue due.”

Existing laws against tax evasion does not take into account digital currencies. These laws, known as the Administrative Cooperation Directive, are essentially designed to prevent people from putting money in bank accounts abroad to avoid taxes. But authorities now fear cryptocurrency accounts could be a loophole.

This bill is also welcome, as it will be necessary to better enforce the financial blockades imposed on Russia. Indeed, the document reveals the fears of EU members dat “cryptocurrencies can be used as a way to avoid finesthose focused on more traditional assets.

According to plans, cryptocurrency platforms must collect and verify information about their users, such as names, addresses, social security numbers, and dates of birth. This information can then be sent to the tax authorities of the user’s country of residence for tax purposes.

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