Companies offering crypto services to residents of the European Union will need to comply with tax reporting rules to close tax evasion gaps.

A new proposal from the European Commission will require crypto asset service providers of all sizes and geographical locations to report on the transactions of EU-based clients to tax authorities.

“Tax authorities currently lack the necessary information to monitor proceeds obtained by using crypto-assets, which are easily traded across borders,” the European Commission wrote in a statement. “This severely limits their ability to ensure that taxes are effectively paid, which means European citizens lose important tax revenues.”

(By Inbar Preiss)