European Commission Cracks Down on Non-Compliant Countries Over Crypto Tax Rules
The European Commission has announced that it will be sending formal notices to twelve countries for failing to fully implement the EU’s tax reporting rules for digital assets. This move aims to ensure that all member states are in compliance with the new tax transparency and information exchange rules for crypto assets.
The countries receiving formal notices include Belgium, Bulgaria, the Czech Republic, Estonia, Greece, Spain, Cyprus, Luxembourg, Malta, the Netherlands, Poland, and Portugal. These countries have been given two months to respond to the letter and comply with the regulations, or the Commission may decide to issue a reasoned opinion.
Background on the Tax Directive
The Commission’s Tax Directive, which expanded the EU’s regulatory framework for digital assets, requires member states to adapt to new developments in different markets and effectively combat identified tax fraud, tax evasion, and tax avoidance behaviors. This is achieved by requiring crypto asset service providers to report certain user and transaction data, aligning with the Organization for Economic Co-operation and Development (OECD) crypto framework.
In addition to the formal notices, the Commission also sent a letter to the Hungarian authorities for non-compliance with the EU Framework for Markets in Crypto Assets (MiCA). Hungary has been given two months to respond, with the Commission noting that some crypto asset service providers have suspended or discontinued certain services due to a change in the Hungarian law on “Exchange Validation Services”.
Progress of the MiCA Framework
Since MiCA was passed by EU lawmakers in 2023, requirements for token issuers and crypto asset service providers have been gradually implemented to allow companies to comply with the regulations. Most crypto companies operating before December 2024 have until July 1 at the latest to comply with all MiCA requirements or cease offering their services, although some member states have shortened this compliance window.
For more information on the European Commission’s efforts to regulate the crypto industry, visit the original article.
