(Kitco News) - The European Parliament has voted in favor of a non-binding resolution that will incorporate the use of blockchain technology to combat tax evasion and coordinate the tax policy for cryptocurrencies.
According to a notice released on Tuesday, 566 out of 705 members of the EU Parliament voted in support of the resolution, which looks to create a “simplified tax treatment” for crypto users who perform occasional or small transactions. The bill also looks to incorporate blockchain technology into the national tax administration “to facilitate efficient tax collection.”
Two areas of clarification specifically highlighted by the resolution are for the European Commission to determine “a clear and broadly accepted definition of crypto assets,” and for a “coherent definition of what would constitute a taxable event.”
“The resolution suggests that the conversion of a crypto asset into a fiat currency might be the more appropriate choice and it asks the Commission to specifically assess this option, along with a more general one concerning the identification of possible taxable events,” the notice said. “The cross-border nature of crypto assets trading makes it also important to know where the taxable event would have taken place.”
The resolution is also requesting that the amendment of the directive on administrative cooperation on taxation include crypto assets in the exchange of information framework.
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On the topic of utilizing blockchain technology for tax collection, the notice highlighted the potential for blockchain to help simplify the tax collection process and make it more efficient.
“Blockchain’s unique features could offer a new way to automate tax collection, limit corruption and better identify ownership of tangible and intangible assets allowing for better taxing mobile taxpayers,” the resolution claims.
The Commission has been asked to identify the optimal way to integrate blockchain technology “to improve the analytical capacity of tax administrations.” The notice also encouraged EU member states to reform their taxation authorities through modernization.
