The comprehensive framework to regulate cryptocurrencies in the EU will come into force in mid-2024.
European Union finance ministers on Tuesday approved new tax transparency rules for companies involved in cryptocurrency transactions , a further step in the fight against fraud facilitated by these digital currencies.
The new obligations “will improve the ability of Member States to detect and combat tax fraud, evasion and avoidance,” said the European Commission, which drafted the text.
What will change in the market
They will enter into force on January 1, 2026, following an advisory opinion from the European Parliament.
The directive will oblige all European Union- based cryptocurrency service providers , regardless of size, to report the transactions of their EU-resident customers.
The scope of application will also include information obligations for financial institutions in relation to electronic money and digital currencies from central banks, as well as the automatic exchange of information on advance tax rulings, mechanisms used by wealthy individuals to reduce their taxation. taking advantage of accommodative regulations abroad.
Currently, tax authorities do not have the information necessary to control the income obtained through the use of cryptocurrencies , which limits their ability to control the actual payment of taxes and deprives states of important tax revenues.
MiCA in the EU
The new regulations approved this Tuesday complement the Regulation on Crypto Asset Markets (MiCA) and the Regulation on Fund Transfers (TFR) approved on April 20 by the European Parliament.
These two regulations were also definitively adopted on Tuesday by the finance ministers of the 27 member states of the European Union meeting in Brussels, thus completing their legislative process.
They will make it easier to fight illegal activities such as money laundering and terrorist financing, but they will also better protect consumers.
Crypto Asset Service Providers (CASPs) will need to register and provide accurate identity details if they want to operate in the EU.
It will also force them to transmit certain information about customers and transactions to the financial institution receiving the operations.