EU to require crypto firms to report customers’ account data to tax authorities

The European Commission plans to require providers of virtual assets (VASP) to share information about users’ accounts with national tax authorities.

The New EU rules will require all crypto-asset service providers to report transactions of clients residing in the EU.

With this proposal, we aim to improve EU countries’ ability to detect and counter tax fraud, tax evasion and tax avoidance.

— European Commission 🇪🇺 (@EU_Commission) December 8, 2022

The initiative is being implemented within the framework of the eighth Directive on Administrative Cooperation (DAC8). It will apply to stablecoins, crypto-derivatives and NFTs.

The European Commission is examining the possibility of extending the requirement to VASPs based outside the EU.

“Anonymity means that many holders of digital assets who earn substantial profits do not come within the reach of national tax authorities. This is unacceptable,” said EU Tax Commissioner Paolo Gentiloni.

According to him, the measures would broaden the provisions of the MiCA cryptocurrency regulation bill. The latter allows opening accounts for EU clients using the “reverse solicitation” procedure.

Earlier media reported that the European Commission planned to raise €2.4 billion in taxes from cryptocurrency companies.

In October, the members of the Council of the EU signed the MiCA regulation text. The document includes rules that apply to issuers of unsecured crypto-assets, stablecoins, as well as trading and custodial platforms.

The text of the bill must be officially approved by the European Parliament. It is expected to be published in the Official Journal of the EU in early 2023.

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