DAC8 – New reporting obligations on crypto-assets and cross-border rulings to high-net-worth individuals
DAC8 constitutes the latest proposal of the European Commission for a Council Directive for an amendment to the Directive 2011/16/EU (DAC) on administrative cooperation in the field of taxation. DAC8 aims among others to strengthen the provisions of the existing DAC framework, to set rules on advance cross-border rulings for high net-worth individuals and put into force a crypto-asset reporting framework for competent EU authorities.
The scope of DAC8 establishes rules for:
Crypto-Asset Reporting Framework
One of the main concerns of the European Union is the lack of information by the tax authorities to monitor proceeds from cryptoassets, since cryptoassets are currently not within the scope of the Directive 2011/16/EU (DAC). The ability of the tax authorities to monitor and ensure that taxes are effectively paid is limited due to the limited reporting of data for revenues and income generated by cryptoassets.
In this respect, the focus of the proposal is on the Crypto-Asset Reporting Framework (CARF), intended to enter into force on 1 January 2026. Further, DAC8 enables EU member states to receive and exchange information about crypto-asset users, by implementing due diligence procedures and reporting rules for operators active in crypto-asset transactions and their users.
Reporting crypto-asset service providers and reportable users
Obliged entities for the reporting of the transfer and exchange transactions regarding crypto-assets are:
a. Cryptoasset service providers authorised in a Member State of the European Union in accordance with the Markets in Crypto-assets Regulation (MiCAR);
b. Crypto-asset operators not falling within the scope of MiCAR;
c. Financial institutions in relation to reporting of e-money and central bank digital currencies.
It is important to note that DAC8 requires reporting for transactions of crypto-asset users residing in the EU, either individuals or entities, that are customers of a reporting crypto-asset service provider, irrespective of its size and location, for the purposes of reportable transactions.
In the cases where:
According to the DAC8 proposal, the following persons are not defined as reportable users:
a) an entity the stock of which is regularly traded on one or more established securities markets;
b) any entity that is a related entity of an entity described in clause (a);
c) a governmental entity;
d) an international organisation;
e) a central bank; or
f) certain other financial institutions.
Reporting EU crypto-asset service providers are required to disclose the information in the Member State where they are resident for tax purposes.
In the case of third-country service providers active in the EU, DAC8 distinguishes two situations, as follows:
Reporting crypto-asset service providers must disclose the reportable information to the relevant authorities no later than January 31 of the following calendar year.
Reportable transactions are exchange transactions and transfers of reportable crypto-assets, including both domestic and cross-border transactions.
The following information of Reportable Users will be exchanged:
The same information will also be exchanged for Reporting Crypto-Asset Service Provider, as well as the individual identification number and global legal entity identifier, a code that provides unique identification information on legal entities that participate in financial transactions globally.
For each Reportable Crypto-Asset, information will be exchanged if any reportable transaction during the relevant reporting period occurs. This reported information consists of the following:
DAC8 will be effective as from 1 January 2026.
DAC8 is considered as an important step towards the enhancement of tax transparency in order to prevent tax fraud, evasion, and avoidance due to the use of cryptoassets. It is important to note that DAC8 imposes a reporting obligation to crypto-asset service providers authorised in a member state of the European Union, under MiCAR but also to other crypto-operators irrespective of their location, providing services to EU residents. The fact that DAC8 does not impose an additional registration burden to cryptoasset service providers authorised under MiCAR enhances the aim of the European Union to create a simplified, yet comprehensive legal framework for the use of cryptoassets.
Savvina Miltiadou Christina Papaioannou
Senior Associate Lawyer Supervisor
Financial Services & Funds Department Tax Department
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