Will the European Union soon implement uniform crypto taxes?
The European Union could soon introduce uniform crypto taxes.
The European Union could soon implement uniform crypto taxes. Experts, however, clash over the move.
In times of inflation, war, and the climate crisis, the European Union is looking for new revenue to fill the budget of the union. In the crypto sector, they seem to have found what they’re looking for. A concept from the European Parliament proposes the introduction of uniform (the same) crypto taxes on Bitcoin and other cryptocurrencies for all member states. In the document, the authors spell out several approaches.
One consideration would be the introduction of an EU-wide capital gains tax. But taxes could also be imposed soon on transactions, mining, or trading crypto assets. The tax rate would be the same across all member states, the authors write. Factors like electricity use and environmental impact could play a role in setting the level. Proof-of-work-based cryptocurrencies like Bitcoin could be disadvantaged. The Commission must come forward with concrete proposals.
The industry is ambivalent about the move. "A uniform European crypto tax could make life easier for citizens and crypto firms," writes Peter Grosskopf, CTO at Unstoppable Finance, on LinkedIn. Sven Hildebrandt of the Stuttgart exchange is, on the other hand, critical of the possible tax burden on PoW-based cryptocurrencies. Others question whether the union has the authority to set EU-wide taxes. Normally, the European Union does not directly involve itself in setting tax rates. National governments usually handle that.
Crypto taxes in the EU so far are very different
When it comes to crypto taxes, EU member states vary greatly. While cryptocurrencies in Germany, for example, can typically be sold tax-free after a one-year holding period, Austria generally imposes an end tax when cryptos are transferred to fiat.
The new proposals would be the next big European project after the MiCA regulation, which was recently postponed due to technical issues. But whether and when the proposals will actually end up as a bill is still uncertain.
