The blockchain to tax cryptos – How to tax these wacky things called cryptos? It’s a recurring question that each state has so far turned to its own sauce. It does not taste the same at all from one country to another. For some, the bill can be steep. Except that this beginning of the week, the question was at the heart of the political debates of the European Parliament. So we would be moving towards common EU regulation? Quick overview of the main axes of this taxation, the consequences of which we could all soon suffer.
Cryptocurrencies, which taxable events?
Reshaping the taxation of crypto-assets is the order of the day. The dossier was adopted by the European Commission by 566 votes to 7, with 47 abstentions, an overwhelming majority. Let’s go into the details.
The objective of MEPs? Fighting tax evasion and streamlining taxation rules at European level. Because today each country has its own rules, more or less restrictive. In France, the tax of 30% on profits prevail. With our German neighbors, on the other hand, after having kept his cryptos on his wallet for a year, they are no longer taxable.
The committee on confirmed, the conversion of cryptos into fiat currencies like the euro, remains the most viable taxable event. However, the deputies leave themselves the possibility of identifying other tax triggers. In addition, Parliament emphasizes the borderless nature of cryptos. In doing so, the Commission is calling for the exchange of international taxpayer information to now contain a crypto component.
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Taxing cryptos thanks to the blockchain, a shame?
Collecting taxes is hard work. But, it turns out that these so-called useless cryptos had the good idea to bring in their suitcases a small revolution which does make sense. Blockchain. This famous chain of blocks enjoys a good reputation in the imagination of our political leaders, unlike its siblings at speculative character, cryptos. So why not use it?
Indeed, this is what our European debutants intend to do. Blockchain as a tax collection tool would automate processes that are currently manual. Via the blockchain, it would be easier to limit corruption and iidentify the assets held by everyoneeven the most wandering of individuals.
The Commission intends to use the full resources of blockchain technology in the service of better traceability of individuals in order to be able to tax them as well as possible, wherever they are on the planet. However, it will be a question of finding the right balance by establishing a skilfully measured control of fraud and not a intrusive mass surveillance infringing on privacy and individual freedoms. But that is another debate.
We all know that the democratization of the sector will go through regulation. And this regulation will not be established without a panel of well-defined taxation rules. However, they will bring with them a set of constraints that will undoubtedly reduce our current scope of possibilities and multiply the phenomena of imposition. Certain freedoms that we enjoy today will disappear in the coming years in favor of better control which, like the other side of the coin, will accompany the sacrosanct global democratization that we are all waiting for. So, good or bad news?
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