On Wednesday 7 December, the European Commission will present a revision of Directive 2011/16/EU on administrative cooperation in the field of taxation to include crypto-assets. The purpose of this revision is to extend the scope to allow for an automatic exchange of information reported by crypto-asset service providers.
“The majority of Member States already have legislation or at least administrative guidance in place to tax income obtained through crypto-asset investments. However, they often lack the necessary information that would enable them to do so”, the Commission said in a document obtained by EUROPE.
In developing its proposal, the institution took into account the OECD’s Crypto-Asset Reporting Framework (CARF), which aims to introduce greater tax transparency for crypto-assets.
The revision provides for an obligation for the crypto-asset service provider, declaring to collect and verify information in accordance with due diligence procedures.
They will have to provide the competent authorities with information on the crypto-asset users who use them to trade and exchange their crypto-assets, regardless of the Member State where the reportable crypto-asset user resides.
If a crypto-asset user fails to provide the required information, after two reminders following the initial request from the reporting crypto-asset service provider, but not before the expiry of 60 days, providers must prevent the user from conducting exchange transactions. A minimum pecuniary penalty applies in the event of non-declaration after two valid administrative reminders or when the information provided contains incomplete, incorrect or false data representing more than 25% of the information to be declared.
Exchanges between Member States will take place using the tax identification number. Member States will have to exchange information on advance cross-border rulings for high net worth individuals issued, modified or renewed after Tuesday 31 December 2024 with other Member States, as well as on those issued, modified or renewed during a period starting 5 years before the date of application of the directive and still valid on Monday 1 January 2024.
However, excluded from the regulation are: - entities whose shares are regularly traded on one or more established securities markets; - governmental entities; - international organisations; - a central bank; - financial institutions other than an investment entity.
This review is one aspect of regulation of crypto-assets. It joins the proposed ‘MiCA’ regulation governing the European crypto-asset market (see EUROPE 13049/21) and the revision of the directive on transfers of funds (see EUROPE 13040/29), which were agreed between the co-legislators earlier this year.
To view Directive 2011/16/EU: https://aeur.eu/f/4ic (Original version in French by Anne Damiani)