- To combat tax fraud and tax evasion, Europe wants the same data exchange for cryptocurrencies and e-money as for other financial products.
Today, the tax authorities have little or no insight into profits made with crypto coins such as bitcoin. Contrary to other financial products such as bank accounts and life insurances abroad, there is no international data exchange. As part of the fight against tax fraud and evasion, the EU has a proposal to extend the so-called assistance directive on data exchange to crypto coins and electronic money.
This directive already regulates the automatic exchange of information between EU -countries for, among other things, real estate and employee wages. Since 2016, the directive also applies to bank accounts and financial products at a foreign bank. The legislative process for the extension of the directive has yet to be fully completed. A consultation round will run until 21 December. The intention is to reach final approval by the third quarter of 2021.
As a result of the amendment of the directive, exchanges (trading platforms for crypto coins, ed.) and digital banks such as the Luxembourg-based Bitstamp, would be obliged to transmit information. The actual data has not yet been definitively determined, but perhaps it concerns the purchases and sales and the balances on the wallets (electronic purses, ed.) at the beginning and end of the year.. Through international data exchange, the tax authorities can obtain information about who have invested in cryptocurrencies and the tax department can actively search for capital gains to be taxed or not. If the capital gain on bitcoins is part of the normal management of your private assets as a prudent person, it will in principle not be taxed.
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