The European Commission is intensifying its efforts to ensure a unified and compliant regulatory landscape for digital assets across the EU, issuing formal warnings to member states lagging in implementation of key directives. These actions underscore the Commission's commitment to both bolster tax transparency and maintain the integrity of its groundbreaking Markets in Crypto Assets (MiCA) framework.
Enforcing Tax Transparency for Digital Assets
The European Commission has initiated formal infringement proceedings against twelve member states for their failure to fully implement the EU's comprehensive tax transparency and information exchange rules concerning crypto-assets. Belgium, Bulgaria, Czechia, Estonia, Greece, Spain, Cyprus, Luxembourg, Malta, the Netherlands, Poland, and Portugal have received formal notification letters, being given a two-month window to comply. This directive aims to modernize the tax framework, tackling fraud, evasion, and avoidance by requiring crypto service providers to report specific user and transaction data, aligning with OECD standards. Failure to act within the stipulated timeframe could lead to the issuance of a "reasoned opinion" from the Commission.
MiCA Compliance Under Scrutiny
Simultaneously, Hungary has been put on notice for non-compliance with the landmark Markets in Crypto Assets (MiCA) framework. The Commission highlighted concerns that an amendment to Hungarian law, pertaining to "exchange validation services," has led some crypto-asset service providers to suspend or discontinue their operations. While acknowledging Hungary's efforts to strengthen anti-money laundering (AML/CFT) safeguards, the EU stressed that such national measures must remain compatible with MiCA. This action underscores the EU's resolve to ensure the uniform application of MiCA, a framework whose requirements for most crypto firms are being phased in, with a crucial compliance deadline of July 1st for many businesses operating before December 2024.
