European Commission Warns 12 EU Countries Over Crypto Tax Rules

Highlights:

• The European Commission has warned twelve EU countries for not applying crypto tax rules.
• These nations have been given two months to fix the gaps or face legal action.
• The new directive requires exchanges to share transaction data to prevent tax evasion.

The European Commission has issued formal warnings to 12 European Union countries for failing to fully implement new rules on crypto tax reporting. The announcement came as part of the January infringements package released on Friday. Belgium, Bulgaria, Czechia, Estonia, Luxembourg, Malta, Greece, Spain, Cyprus, the Netherlands, Poland, and Portugal were all named in the list. Each of them now faces a two-month deadline to correct the shortcomings.

EU Starts Action Against Countries Over Delayed Crypto Tax Rules

The notices mark the first stage of an infringement process that begins when member states do not properly apply EU law. If the countries fail to act within the given time, the Commission can escalate the matter by issuing a reasoned opinion. That step could eventually bring the case before the Court of Justice of the European Union. Alongside the warnings, the Commission confirmed that 72 cases have been closed after the issues were resolved. In those instances, the infringement procedure will not continue further.

At the center of the dispute is a new rule that expands tax transparency to crypto assets. Under this rule, service providers like exchanges and custodial wallet firms must share user and transaction data with national tax authorities. The Commission says the goal is to spot tax evasion, fraud, and avoidance linked to digital assets.

Crypto transactions move across borders very fast and often lack a clear user identity. This makes them hard to track using traditional tax systems. The directive aims to fix these gaps and improve cooperation between tax authorities across the bloc. Proper implementation is important for real oversight. Although the rule was agreed at the EU level, each member state must pass local laws and set up systems to apply it. The Commission says several countries have moved slowly or only partly applied the changes, even though they had enough time.

EU Flags Hungary Over MiCA Compliance Concerns

In addition to the tax transparency issue, Hungary has been flagged for concerns over compliance with the EU’s Markets in Crypto-Assets (MiCA) framework. The Commission sent a separate letter of formal notice to Hungary regarding changes in its national law that affect exchange validation services. According to the Commission, those changes have caused some crypto service providers to suspend or stop certain operations in Hungary. The Hungarian government said the amendments aim to strengthen anti-money laundering and counter-terrorism financing safeguards.

However, the Commission stressed that national rules must remain aligned with MiCA. “While Hungary aims to strengthen anti money laundering (AML/CFT) safeguards, such measures must remain compatible with MiCA,” said the European Commission. The EU has given Hungary two months to respond. If Hungary does not resolve the concerns, the Commission could move the case to the next stage of infringement proceedings.