Tax transparency rules for crypto-asset transactions (DAC8) [EU Legislation in Progress]

Written by Pieter Baert (4th edition, updated on 22.07.2024).

The crypto-asset sector, while still relatively new, has already changed the world of payments and investment forever. The fast-changing, mobile nature of the sector and its growing market prominence poses challenges, however, for tax authorities, which are not always able to track the capital gains made from trading crypto-assets.

On 8 December 2022, the European Commission proposed to set up a reporting framework that would require crypto-asset service providers to report transactions made by EU clients. This would help tax authorities to track the trade of crypto-assets and the proceeds gained, thereby reducing the risk of tax fraud and evasion. The reporting framework would be set up by amending the Directive on Administrative Cooperation (DAC), which is the main framework for other data exchanges between tax authorities. The proposal also puts forward a series of (smaller) changes to improve the existing exchange of tax-related information.

The proposed directive was subject to a special legislative procedure, requiring unanimous support in the Council, following consultation of the European Parliament and the European Economic and Social Committee. The European Parliament adopted its (non-binding) opinion in September 2023. The Council adopted the proposal in October 2023, expressing broad support for the extension of the DAC towards crypto-asset transactions.

Versions

• July 2024: Tax transparency rules for crypto-asset transactions (DAC8) (4th edition)