EU policymakers vote to modernize tax with blockchain technology

The European Parliament voted in favor of a resolution that acts as a crypto-focused double whammy — tackling both tax evasion through crypto-assets and streamlining rules for their taxation.

The resolution tries to identify what makes a taxable event and suggests that the conversion from crypto to fiat currency is the most viable option. The European Commission is yet to clearly define this and other possible taxable events and is considering the borderless nature of crypto-assets. 

Additionally, the exchange of taxpayer information by cross-national tax administration will need to include information on crypto-assets. However, the policy also calls for a “simplified tax treatment” for smaller transactions.

Blockchain technology is also pushed forward as an instrument for tax collection, identifying the technology’s potential to “automate tax collection, limit corruption and better identify ownership of tangible and intangible assets allowing for better taxing mobile taxpayers,” according to the European Parliament’s release

The Commission is called upon to implement blockchain technology into taxation programs. It also encourages EU member states to reform their taxation authorities.

The file passed in the Parliament’s plenary session with an overwhelming majority of 566 votes in favor, 7 votes against, and 47 abstentions. Leading the report is MEP Lídia Pereira, a member of the center-right European People’s Party in the Parliament.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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