On Tuesday the members of the European Parliament voted in favor of a non-binding determination focusing on utilizing blockchain technology to fight tax policies on crypto assets and tax evasion.
Lidia Pereira drafted the resolution after 566 out of 705 members voted to use blockchain technology to fight tax evasion. Among these, 7 votes were against the resolution, while 47 members were absent. As per the legislative body, the resolution consisted of a recommendation for its twenty-seven member states to consider a “simplified tax treatment” for the crypto users that make small and occasional transactions. The purpose is to make the national tax administrations use the blockchain technology “to ease up the tax collection process”.
Integrating Blockchain Technology in Tax Programs
The non-binding resolution enables the members of the parliament to implement blockchain technology into several tax programs, stating, “the innovative features of the blockchain technology provide a new way to limit corruption, automate tax collection, and improve identifying ownership of intangible and tangible crypto assets enabling a better taxing treatment for mobile taxpayers. It is important to work on the policies and identify the best ways of utilizing the technology and boost the analytical potential of tax administrations”.
According to the resolution, the crypto assets must be subjected to transparent, fair, and effective taxation. This requires authorities to implement simple tax treatments for small investors, and transactions. To implement this, the resolution asks the commission to evaluate the different methods the member states utilize to tax crypto assets. The resolution also asks for a proper definition of crypto assets in a wider aspect and then decides on the taxable events. The resolution also suggests that the national administrations should utilize all the instruments available to leverage effective tax collection, and recognize blockchain as a tool.
The European Union lawmakers have taken a step to regulate the crypto market via markets in the crypto assets framework. The bill was first produced by the 2020 European Commission and is adopted in 2021, by the European Council and focuses to develop a regulatory framework for crypto assets for member states of the European Union. However, many are assuming the policies to be under effect in 2024.