European Parliament Draft Report on Crypto | Cadwalader, Wickersham & Taft LLP

A draft report on the impact of cryptography and the blockchain on taxation was presented to the European Parliament’s Subcommittee on Tax Affairs on 25 April 2022. The draft report consists of a motion for a European Parliament resolution which, once adopted, will be forwarded. to the European Council and the European Commission. The draft resolution contains a number of recommendations for the European Commission and EU Member States, including the digital level for EU tax administrations, a European approach to the taxation of cryptocurrencies and the improvement of the exchange of information on cryptocurrencies between administrations. EU tax authorities. The draft resolution also emphasizes the importance of sufficient anti-tax fraud policies in the digital and cryptographic space and suggests exploring the possible use of the blockchain to facilitate tax compliance.

Use of technology by tax administrations

The draft resolution emphasizes, in the age of digital development, the importance of EU national tax administrations receiving adequate investment from EU Member States in training human resources, digital infrastructure and specialized staff and equipment. In particular, the draft resolution states that tax authorities that adapt to new emerging technologies, such as the blockchain and artificial intelligence, can streamline tax procedures, facilitate tax compliance and increase the traceability of taxable transactions. .

The draft resolution also emphasizes that this technology should, on the one hand, ensure that taxation better reflects the business environment in the digital age and, on the other hand, ensure high levels of data protection.

Fight fraud and tax evasion

Especially in light of the development of the digital economy (including the growth of interest rates and the increasing use of cryptocurrencies), the draft resolution calls on the European Commission to promote an assessment of different national anti-tax fraud policies in EU Member States and to create a new platform for sharing training and best practices against tax fraud among EU national tax authorities.

The draft resolution also calls on the European Commission and EU national authorities to ensure that blockchain technology is developed in accordance with the rules on the processing of personal data, cybersecurity and the fight against money laundering / the fight against terrorist financing.


The draft resolution recognizes the legal uncertainty caused by the absence of a uniform definition of the tax base of cryptocurrencies. He also points out that the development of cryptocurrencies raises key questions about the type of taxation to be applied, when a taxable event occurs and how cryptocurrencies are valued. Therefore, the draft resolution states that the benefit of a European approach is focused on instruments related to administrative cooperation and corporate taxation. The draft resolution also points to the need to continue negotiating the international instruments governing the taxation of cryptocurrencies.

With regard to corporate taxation, the draft resolution recalls that a fully integrated European single market requires a common approach to the taxation of cryptocurrencies. The draft resolution therefore calls on the European Commission to consider the size of cryptocurrencies in existing Commission proposals for a new framework for corporate taxation in the EU, known as the “Business in Europe: Framework for Income Taxation” (BEFIT). . which aims to move the corporate tax system of EU Member States towards common tax rules and a fairer distribution of tax rights between Member States. The draft resolution also calls on EU Member States to take cryptocurrencies into account in their national tax legislation and reform programs.

With regard to administrative cooperation, the draft resolution considers that an amendment to the Administrative Cooperation Directive is needed in order for European legislators to further assess whether other categories of revenue and assets, such as cryptocurrencies, should be included in the Administrative Cooperation Directive.


The European Commission has already proposed an amendment to the Administrative Cooperation Directive, known as “DAC 8”, so that EU tax administrations can obtain the necessary information to ensure that tax burdens are shared fairly between different types of taxpayers. in particular, those taxpayers who make money through cryptocurrency. The European Commission is considering whether provisions are required in DAC 8 to ensure that relevant data on cryptocurrencies and electronic money are included in the provisions for the mandatory automatic exchange of information between EU Member States (that isunder DAC2, which implemented the common information standard (the “CRS”) in the EU).

In March 2021, the European Commission launched a public consultation aimed at strengthening its rules on administrative cooperation and expanding the exchange of information between EU national tax authorities on electronic money and cryptocurrencies. This public consultation closed in June 2021 and the results will be introduced in DAC 8 later in 2022.

Ratification of the draft resolution would mean that the European Parliament would provide support to the European Commission for the implementation of the DAC 8.

Given that the implementation of DAC 8 is likely to bring a number of additional regulatory requirements and reports on cryptocurrency owners and cryptocurrency intermediaries, it is inevitable that developments in this area deserve continued attention.

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