Adoption of the Directive DAC8 - Tax Transparency in Trading with Crypto Assets

The sector of crypto assets, though still relatively a new one, has already fundamentally transformed the previous world of payments and investments. This dynamically growing industry poses presently a significant challenge for the Tax Authorities, which are not always capable to track capital gains acquired through trading with crypto assets. Therefore, in order to reinforce international assistance and a cooperation in tax administration through the automatic exchange of information, on 17th October 2023, was adopted the 8th Directive - DAC8. The objective of this Directive is to ensure fair taxation, eliminate tax avoidance, and prevent tax evasion, particularly in the realm of trading with crypto assets and e-money. The Directive is set to be implemented from 1st January 2026, and individual member states are obliged to incorporate their provisions into their legislation by 31st December 2025.

Who will be affected by the new reporting obligations resulting from DAC8?

The new reporting rules will apply to all providers of crypto asset services, who are obliged, in line with DAC8 rules, to report information about users of crypto assets to the Tax Authorities. Tax Authorities will now have the automatic obligation to share information amongst themselves. Consequently, through this mutual exchange procedure, information regarding transactions with crypto assets will be reported to the Tax Authority of the state, in which the user of crypto assets has the tax residence. The process of automatic exchange of information will enable to the Tax Authorities to monitor and to evaluate transactions involving crypto assets in much greater detail, aiming to prevent attempts to hide income derived from trading with crypto assets.

What will be subject to reporting?

Subject to reporting will be encompassed crypto assets used for payment and investment purposes. This includes crypto assets issued in the decentralized manner, stablecoins including tokens of electronic money defined in EU regulations, and certain non-fungible tokens.

What is the deadline for fulfilling the reporting obligation?

Reporting will be conducted through a designated electronic form within nine months following the end of the calendar year. The initial reporting period will start from 1st January 2026.

What other areas will DAC8 affect besides crypto asset transactions?

  • In a bid to prevent tax evasion, member states, in line with DAC8, will be required to ensure information exchange concerning non-custodial dividends, i.e., income from dividends not paid on a custodial account. The primary essential identifier in this process of reporting will be the tax identification number (TIN), enabling to member states to link the obtained information, to identify taxpayers easily, and ultimately to determine the relevant tax liability in a correct way.
  • Cross-border binding opinions for individuals involving an element of international taxation will also be part of the automatic information exchange. These opinions should serve as a source of a clear demonstration or as an explanation to ensure consistent application across all member states. Adopting common procedures, applying taxation principles and conclusions arising from them, should also contribute to the reduction of the risk of tax fraud.

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