New crypto tax rules to force asset providers to report all transactions
ALBWABA – European Union (EU) ministers approved tighter rules on Tuesday on cryptocurrency (crypto) transactions as part of a union-wide crackdown on the use of crypto in tax fraud, according to Agence France-Press (AFP).
The EU Parliament also approved the world’s very first comprehensive rules on crypto assets last month.
Such assets include bitcoin and ethereum, as well as tradable tokens powered by blockchain technology, like Non-Fungible Tokens (NFTs).
EU ministers of economy and finance on Tuesday agreed on rules that allow for the prosecution of individuals who stash their cash were tax authorities have no oversight, AFP reported.
These rules are meant to plug loopholes that allow people to avoid income taxation by using crypto assets, said Swedish Finance Minister Elisabeth Svantesson.
"This reduces the risk of crypto assets being used as a safe haven for tax avoidance and tax fraud," she explained.
Tax authorities in the EU currently lack the information they need to monitor proceeds from crypto assets, which are easily traded across borders, it said.
As a result, member states are deprived of important tax revenues, the commission added.
The new rules will force all crypto asset providers (CASPs) based in the EU, regardless of their size, to report all client transactions to the respective authorities.
This will also make it harder for criminals to use cryptocurrencies for illicit activities, such as money laundering.
These rules and directives will begin to progressively come into force as of July 2024.
