EU Crypto Tax Plans Include NFTs, Foreign Companies, Draft Text Shows
The European Union (EU) is set to introduce a new draft bill that will force cryptocurrency companies to share information about their clients’ holdings with tax authorities. The proposed data-sharing law is based on a model developed by the Organization for Economic Cooperation and Development (OECD) and is expected to be agreed upon by finance ministers in the upcoming week. If approved, the new law would allow tax authorities to share data within the 27-nation bloc, aiming to prevent EU residents from hiding their cryptocurrency assets abroad to avoid paying taxes.
The draft bill, which was released to CoinDesk under freedom of information laws, closely aligns with proposals made by the European Commission in December 2022. The Commission had proposed the creation of a register of crypto asset operators by December 2025, bringing forward the previous deadline by one year. The rules, under the proposed legislation, would come into effect from January 1, 2026.
The proposed law, known as the eighth directive on administrative cooperation (DAC8), includes trading platforms for non-fungible tokens (NFTs) that can be used for payment or investment, as well as providers from outside the EU that have EU clients. This provision is controversial since it means overseas crypto firms can report to foreign authorities that meet EU norms.
Commission officials have praised the bill, and it received unanimous support at a recent meeting. However, some finance ministers have yet to receive formal approval from their parliaments. The proposed legislation aims to ensure that cryptocurrency assets are subject to the same tax regulations as traditional financial assets. By doing so, it hopes to create a level playing field and prevent tax evasion by crypto investors.