European Union Finance Ministers Agree on New Tax Transparency Rules for Crypto Asset Transaction Facilitators Serving Clients Resident in the EU

On 16 May 2023, the European Commission published a press release announcing that the EU Finance Ministers agreed on new tax transparency rules for all service providers, which are based in the EU, facilitating transactions in crypto-assets for customers resident in the EU.

The new tax transparency rules were recently proposed by the EU Commission to complement the Markets in Crypto-assets (MiCA) Regulation and Transfer in Funds Regulation (TFR), and are in line with the OECD’s Crypto-Asset Reporting Framework.

The new rules aim to enhance EU Member States’ ability to identify and counter tax fraud, tax evasion and tax avoidance, by requiring all crypto-asset providers based in the EU, regardless of their size, to report transactions of clients residing in the EU. In addition, the Directive’s scope has been extended to include reporting obligations of financial institutions regarding e-money and central bank digital currencies and the automatic exchange of information on advance cross-border rulings used by natural persons.

The new reporting requirements on crypto-assets, e-money and central bank digital currencies will enter into force on 1 January 2026 and when the consultative opinion of the European Parliament becomes available final adoption of the new rules will be possible.

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*Source: European Commission.