EU ministers agreed to tougher measures to combat tax evasion with cryptocurrency as Brussels increased its efforts to regulate the volatile industry.
The absence of regulation in the digital currency sector is a growing concern for regulators around the world, but then the countries already taken action to protect investors.
Crypto assets, such as bitcoin and ethereum, and tradable tokens whose value is guaranteed by blockchain technology, such NFTs, were given the world’s first complete guidelines by the parliament of the 27-member EU last month.
EU officials are concerned
EU economy and finance ministers met and settled on procedures to pursue tax evaders who hide their money in offshore accounts.
Swedish Finance Minister Elisabeth Svantesson said the measures will remove loopholes that currently allow people to avoid paying taxes on income earned using crypto assets.
“This reduces the risk of crypto assets being used as a safe haven for tax avoidance and tax fraud,” she said.
The European Commission, which is responsible for enforcing laws and regulations, expressed its appreciation for the ministers’ decision, noting that it will also aid in the fight against tax evasion.
Crypto assets are easily exchanged across borders, but tax authorities lack the knowledge to monitor the resulting income.
The commission noted that this results in significant lost tax revenue for member states. All CASPs, regardless of size, will be required to record customer transactions under the new laws.
To further combat tax evasion on the part of the wealthy, the EU will implement an automatic exchange of tax judgements related to these people.
After the Parliament passes a resolution, the directive will become law on January 1, 2026.
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