25/01/23

EUROPE: Crypto Tax Proposed by Lawmakers to Fund EU Budget.

As published on coindesk.com, Tuesday 24 January, 2023.

Lawmakers in the European Parliament have proposed taxes on crypto assets to fund the European Union's annual budget of 170 billion euros ($185 billion).

Options included in a draft report for the Parliament’s budget committee, published on Jan. 16, include taxes on investors’ capital gains, transactions or mining.

The report “suggests the introduction of a European tax on crypto assets, whose revenues would flow into the European budget,” the report by French lawmaker Valérie Hayer and Portuguese Social Democrat José Manuel Fernandes stated. “Regulating and taxing crypto assets at the EU level is more efficient than at national level given their high mobility and cross-border dimension.”

In December, the European Commission, the EU's executive body, proposed new rules to exchange details of a crypto investor’s holdings between tax authorities – but decisions on what and how much to tax remain a matter for national governments.

Other lawmakers on the committee have until Feb. 2 to propose changes to the report. In reality, the Parliament’s 705 lawmakers have limited control over tax laws, which are usually agreed by the bloc’s 27 national finance ministers acting unanimously.

European Central Bank’ board member Fabio Panetta has previously said taxation could be used to address crypto's environmental costs, especially arising from the proof-of-work technology used in the mining of bitcoin (BTC).

The lawmakers are also looking at taxes on corporate profits, carbon-intensive imports and financial transactions as they seek to fund the bloc’s budget, which is now largely financed by national contributions and spent on farm subsidies and regional investments.