European Commission Urges 12 Countries to Adopt Crypto Tax Rules

The European Commission has stepped up enforcement of its crypto tax rules, instructing 12 EU member states to close gaps in implementing the bloc’s tax reporting framework for digital assets. In a January infringements package, the Commission named Belgium, Bulgaria, Czechia, Estonia, Greece, Spain, Cyprus, Luxembourg, Malta, the Netherlands, Poland and Portugal as needing to send formal notices to ensure full compliance with the EU’s new crypto-asset tax transparency regime. The move signals a broader push toward tax data exchange and transparency in a sector that has long faced regulatory ambiguity, with the Commission outlining a two-month deadline for responses before considering further action.

The commission’s action is anchored in a directive designed to bring crypto-asset service providers into the EU’s tax oversight net. Under the directive, entities operating within the bloc are expected to report certain user and transaction details to national authorities, a step intended to curb tax fraud, evasion and avoidance. The approach mirrors the OECD’s crypto framework, which several jurisdictions have started adopting to harmonize reporting standards and reduce cross-border tax gaps. The Commission’s move is not just about collecting data; it is about building a cohesive framework that can be used to audit activity across borders and ensure that digital-asset markets do not escape scrutiny merely because they operate outside traditional financial channels.

As part of the same enforcement wave, the Commission noted a formal notice to Hungary for MiCA (Markets in Crypto Assets) compliance shortcomings, granting two months for a response. Hungarian authorities have reportedly paused or scaled back certain services under amendments to national law governing “exchange validation services,” a move the Commission cautions must stay aligned with MiCA. This intertwining of tax transparency rules with MiCA’s broader regulatory mandate highlights how the EU is knitting together separate strands of crypto regulation—tax, consumer protection, licensing and enforcement—into a unified supervisory regime.

Beyond the formal notices, EU regulators have underscored that the MiCA framework, which began its rollout after its 2023 approval, is being enacted in stages to give market participants time to adjust. The core of MiCA requires token issuers and crypto-asset service providers to meet specific operational and disclosure standards, with the majority of pre-existing players facing a compliance deadline around mid-2024. While many member states began tightening the noose gradually, several jurisdictions trimmed the transition window, intensifying the pace of change for exchanges, wallet providers and other crypto-related services operating within the bloc. The EU has shown a willingness to enforce these rules with procedural rigor, warning that non-compliant entities risk being barred from offering services in one of the world’s largest digital asset markets. The trend toward stronger regulatory alignment has broad implications for the sector’s growth trajectory, as firms must invest in compliance and risk controls to survive in Europe’s regulated environment.

Related: France flags 90 unlicensed crypto companies ahead of MiCA cutoff: Report

The Commission’s January infringements package, which also references OECD-aligned tax reporting measures, emphasizes that the new regime is meant to keep pace with evolving crypto markets and the variety of services now available—from custody and trading to staking and on-chain transfers. The directive seeks to ensure that crypto asset service providers capture and relay relevant information about their customers and the transactions they process, enabling tax authorities to identify potential areas of non-compliance. In practical terms, this means EU member states will be required to assess whether local firms are reporting data in line with the directive and, if not, to formally notify the providers to take corrective action. The 12 named countries are expected to respond within two months, after which the Commission could issue a reasoned opinion outlining the specific remedial steps and timelines.

MiCA framework is moving along

The MiCA regime represents a comprehensive attempt to regulate crypto markets across the European Union, consolidating a patchwork of national rules into a single framework. Since its passage in 2023, the regulation has been implemented in phases, giving businesses a window to align with new requirements while continuing to operate. The directive’s emphasis on AML/CFT safeguards, disclosure duties and operational standards is designed to reduce risk in a rapidly evolving sector and to enhance market integrity. Although the timeline for full compliance has varied by country, the overarching objective remains clear: minimize regulatory grey areas that could be exploited for wrongdoing and provide a predictable, standards-based operating environment for legitimate players. The EU’s approach is closely watched by global regulators and market participants who seek clarity on how the bloc will balance innovation with consumer protection and tax enforcement.

The enforcement signals come as crypto markets navigate a broader regulatory climate that is becoming increasingly harmonized across borders. For traders and institutions, the EU’s push toward standardized reporting and stronger oversight could influence liquidity, risk appetite and cross-border activity within Europe. The commission’s warnings also echo a broader trend in which policymakers are prioritizing transparency over speed, recognizing that well-defined rules help minimize systemic risk and build trust in crypto markets among mainstream financial participants and the public.

Why it matters

For crypto service providers operating in Europe, these developments translate into tighter compliance obligations and more formalized data-sharing practices. Firms must ensure they have robust processes to collect and relay customer data and transaction details to tax authorities, reducing the potential for regulatory gaps that could be exploited for tax evasion or fraud. As regulatory scrutiny tightens, businesses may also face increased costs related to reporting infrastructure, auditing and customer due diligence. While this could raise barrier-to-entry for newer players, established firms may benefit from a clearer, more stable regulatory baseline that reduces ambiguity and fosters long-term planning.

Investors should monitor the evolving MiCA regime and the tax-reporting framework as determinants of market structure and strategic risk. A consistent, enforceable framework can improve market quality by mitigating exceptional risk events emanating from opaque offshore activity or inconsistent cross-border reporting. At the same time, the drive toward greater transparency could shift the competitive landscape, favoring entities with robust compliance programs and transparent governance. For builders and developers in the crypto space, these regulatory shifts underscore the importance of designing products and services that align with EU requirements from the outset, rather than pursuing rapid growth at the expense of compliance.

From a macro perspective, the EU’s initiative reflects a broader pattern: governments are integrating digital assets into established tax and financial supervision channels, seeking to curb illicit activity while preserving a conducive environment for legitimate innovation. The integration with OECD standards highlights a coordinated, international dimension to these efforts, signaling that the regulatory trajectory for crypto assets is unlikely to ease in the near term. As MiCA advances and tax-reporting rules take greater effect, the European market could see a shift in participant behavior, with institutions paying closer attention to compliance credentials, reporting capabilities and governance rigor—the kind of factors that increasingly determine which platforms win in regulated markets.

What to watch next

• The two-month response window for the 12 named member states to comply with the formal notices.
• Whether the Commission issues a reasoned opinion against any country that fails to respond adequately.
• Hungary’s forthcoming submission on MiCA compliance and any subsequent regulatory actions.
• Updates on MiCA implementation timelines across other member states and potential refinements to the reporting regime.
• Any new OECD crypto-framework updates that feed into EU regulatory expectations.

Sources & verification

• European Commission infringements package announcing formal notices to 12 EU member states over crypto asset tax reporting compliance and the two-month response window.
• The directive expanding EU tax transparency and information exchange rules for crypto assets, aligned with OECD crypto framework.
• Formal notice references to Hungary regarding MiCA compliance and the reported impact on exchange validation services under national law.
• France’s related coverage on unlicensed crypto firms ahead of MiCA cutoff for potential context on enforcement momentum.

This article was originally published as European Commission Urges 12 Countries to Adopt Crypto Tax Rules on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.