EU plans €2.4bn in taxes on crypto firms

The European Commission’s proposal to tax the crypto industry is expected to raise up to €2.4 billion. The Block reports, citing a draft document.

The directive could be adopted by the EU’s executive body this week.

The document states that the proposal closes a “regulatory gap” for crypto investors and for the possibility of tax avoidance. The draft is also meant to ensure that member states avoid shortfalls in fiscal receipts.

The document defines crypto assets as “issued in a decentralized manner, as well as stablecoins and some non-fungible tokens.” Under the rules, coins used as means of payment or investment would be covered, with possible exemptions for “restricted networks and some utility tokens”.

Crypto service providers in the EU will report to national tax authorities. Because the document is a directive, not a regulation, EU member states remain free to apply its provisions.

According to the publication, an earlier version of the proposal would have extended its norms to both centralized and decentralized platforms. In the draft for adoption there are no such distinctions, and the rules apply to all regulated crypto-service providers.

The proposal envisions changes to certain EU directives on tax authority cooperation to streamline information exchange and reduce administrative burden.

If adopted, some provisions would take effect in 2025, with the bulk of changes coming into force in 2026.

Earlier, the European Parliament pushed back to 2023 the final vote on the cryptocurrency regulation bill MiCA.

According to Martin Bruncko, vice-president of Binance’s European arm, the document will simplify the work of industry companies.

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