According to Law360, The European Commission plans to establish a central register of crypto assets held in European Union member countries by 2026, according to the draft of a new law designed to curb tax evasion from use of the technology, seen by Law360 on Wednesday December 1, 2022.
The eighth amendment to the Directive on Administrative Cooperation in Tax Matters, known as DAC8, is set to be published Dec. 7 and would require tax authorities across Europe to share information with each other about citizens' crypto assets. The commission, the EU's executive branch, would also have to establish a central register for information to be recorded and shared, to be made available to the competent authorities of all member countries.
The law would require crypto exchanges and digital wallet providers to give tax authorities information on their customers' holdings. This would be carried out by extending the scope of the automatic exchange of information requirements to crypto-asset service providers, according to the draft.
An explanatory memorandum attached to the legislation said tax authorities currently don't have enough information to monitor crypto assets and the money generated from them.
"There Is a Lack of Information Available to Tax Administrations regarding Crypto Assets, While the Crypto Assets Market Has Gained in Importance over the Last Few Years," the draft law said.
the Crypto Assets Market Has Gained in Importance
Over the Last Few Years," the draft law said.
DAC8 is intended to formalize the taxation of crypto assets and electronic currency across the EU and to ensure consistency with the bloc's anti-money-laundering law.
The commission said it aims to ensure adequate taxation of revenue stemming from investments in, or payments with, crypto assets and so-called e-money.
Under a draft of a separate law recently obtained by Law360, financial institutions would also be banned from keeping anonymity-enhancing, as well as anonymized, crypto coins.
The addition of anonymity-enhancing crypto assets, which would bring in privacy coins such as Monero and Dash, is in line with the logic of the original text, according to notes in that draft.
The Organization for Economic Cooperation and Development said the reporting framework for cryptocurrency would provide for transparency in crypto transactions through the annual automatic exchange of information with the residence jurisdictions of taxpayers.
This would be done in a standardized way similar to the common reporting standard, the OECD said.
Read more at: Tax Times blog