Cryptocurrency accounting and taxation in Europe

Cryptocurrency accounting and taxation in Europe

Cryptocurrencies have long ceased to be a tool for a narrow circle of enthusiasts — today they are an essential element of Europe’s financial system. However, with growing popularity come new challenges: taxation, reporting, and regulation. Many investors and entrepreneurs still lack a clear understanding of which operations are taxable and what risks they may face in case of non-compliance.

In most European countries, taxes apply not only to selling cryptocurrency for fiat but also to exchanging one crypto for another, paying for goods or services with digital assets, and receiving income in the form of salaries, mining, or staking rewards. On the other hand, buying crypto with euros or dollars is often tax-free, though nuances depend on the jurisdiction.

A key point: all transactions are converted into national currency at the exchange rate valid at the time of the transaction. This makes precise documentation of cash flows critically important.

The European Union has already taken a major step toward harmonizing the rules. The MiCA Regulation has already entered into force, establishing unified standards for crypto market participants. In addition, tax transparency rules require exchanges and service providers to share customer transaction data with regulators. This means that grey schemes are disappearing, and having a legal business structure is becoming an absolute necessity.

Non-compliance brings serious risks: fines for undeclared income, frozen accounts, and legal uncertainty for companies. At the same time, the crypto market remains vulnerable to fraud and technical attacks, which makes transparent solutions even more crucial.

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• Banking Infrastructure
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• Tax Consulting
  • Analysis of obligations in selected jurisdictions.
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