According to planned law, businesses of any size processing cryptocurrency transactions for clients in the European Union would soon need to record these for tax purposes.
The policy states that even non-European crypto-asset operators will need to report transactions if they have clients who are EU residents. It was proposed as an addition to a larger package of anti-tax evasion measures.
Companies would be required to give tax authorities personal information on their customers, such as where they live and when and where they were born.
Additionally, they would have to list the sum the individual paid for cryptocurrency or the proceeds from selling it.
In a document describing the directive, policymakers claimed that enforcing a requirement to record income from cryptocurrency investments would assist EU member states in accurately determining the amount of taxes they owe, generating an additional payment of up to €2.4 billion.
The commission asserts that standard reporting regulations would benefit the sector as well.
The suggestion stated that “transparency on revenue earned by investors in crypto-assets will improve the equal playing field with more traditional investments.”
The restrictions would cost the EU an initial €300 million plus an additional €25 million annually to execute.
Policymakers claim that the program will have a “minimal” impact on small- and medium-sized businesses because they already have access to the information that has to be disclosed.
Although the project will increase compliance costs, having a uniform set of regulations across the EU may be preferable for SMEs than a potential patchwork of reporting requirements, according to the Council’s summary of its impact assessment.