Brussels Prepares to Start Negotiations on European Union Crypto Tax, Report Disclosure

European officials have indicated that the European Commission is preparing to discuss with member states the adoption of a common tax regime for crypto assets. Negotiations with the national treasury are expected to begin next year with the aim of ending the differential tax treatment of cryptocurrencies across the bloc’s 27 jurisdictions.

European Union Considers Single Tax Scheme on Cryptocurrency Income and Profits

The executive body in Brussels, the European Commission, intends to soon launch negotiations with the member states’ finance ministries on whether to establish a Union-wide tax regime on cryptocurrencies. death is guaranteed, a Politico report revealed on Thursday, citing three EU officials.

Discussions will begin in 2023, the sources said. Their focus will be on sharing best practices as crypto wealth is currently subject to different taxes in each country. Commenting on the initiative, a Commission spokesman stated:

Difficulties in classifying, valuing, and managing crypto assets pose challenges to tax authorities seeking to tax them fairly and efficiently.

However, before implementing a single tax regime, the European Union needs to introduce new requirements for crypto companies to collect detailed information about digital asset owners, both individuals and businesses and share them with tax authorities across the EU, the report commented.

This will allow tax authorities to have a clear idea of ​​where crypto holdings are. The European Commission is expected to propose such regulations in December or January but will likely start enforcing them in 2026, which would allow it to impose a crypto tax next year.

European institutions have been working on a comprehensive regulatory framework for cryptocurrencies known as the Market in Crypto Assets (MiCA) that was agreed this summer. Media reports attributed the delay in its adoption to the need to translate complex legal documents into all official EU languages. The MiCA will come into force in 2024.

Currently, member states apply different rules for taxing income and capital gains from cryptocurrencies, with rates ranging from 0 to 33%, Politico noted. Authorities in several European countries are revising policy before a decision can be made at the EU level.

Portugal, for example, which does not tax profits from cryptocurrency trading, unless they are part of a business, now intends to tax profits from crypto investments short-term starting in 2023. Traders withdrawing any one-year crypto proceeds will face a tax of 28%, according to the budget for next year.

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