EU Greenlights DAC8: The Cryptocurrency Tax Revolution

In a decisive move, EU lawmakers granted their resounding approval to the 8th edition of the Directive on Administrative Cooperation [DAC8], a groundbreaking cryptocurrency tax reporting regulation. This decision unfolded on September 13th during a meeting held in Strasbourg, France, marking a significant milestone in the journey towards DAC8’s implementation. The outcome of the vote was overwhelmingly positive, with 535 votes in favor and a mere 57 against, signifying the successful passage of DAC8 through its final hurdle.

The genesis of this pivotal directive traces back to May 16, 2023, when EU Member States reached a political consensus regarding new tax transparency rules applicable to all service providers engaged in facilitating transactions involving crypto-assets, electronic money, and central bank digital currencies [CBDCs] for EU residents. These innovative reporting requirements are poised to come into effect on January 1, 2026, through the EU DAC8 Directive.

The latest iteration of DAC introduces a comprehensive framework encompassing disclosure and reporting obligations tailored specifically for crypto-intermediaries involved in transactions conducted by EU customers. EU documents elucidate that the core objective of DAC8 is to endow tax authorities with the capability to meticulously monitor and evaluate all cryptocurrency transactions conducted by both organizations and individuals within the EU member states.

EU’s Latest Crypto Framework Adheres To CARF

Insiders privy to the matter divulged that DAC8 has drawn inspiration from the OECD Crypto-Asset Reporting Framework [CARF], a foundational set of model regulations governing the reporting and exchange of information pertaining to crypto-transactions. Conversely, the G20 consortium of nations remains in deliberation regarding CARF’s status as a potential global minimum standard. Nonetheless, critics of DAC8 have voiced reservations, contending that it brings little differentiation from CARF and potentially diminishes the authority vested in individual member states with regard to oversight.

Max Bernt, the Chief Legal Officer at Blockpit, articulated these concerns, emphasizing the sweeping changes brought about by DAC8. He particularly highlighted the obligation imposed on Reporting Crypto Asset Service Providers [RCASPs] to discern, on a case-by-case basis, whether a transferred crypto-asset qualifies for reporting.

The passage of DAC8 represents a watershed moment in the taxation landscape of the European Union, ushering in an era of heightened transparency and accountability in the realm of cryptocurrency transactions. As this directive inches closer to its effective date in 2026, it promises to reshape the regulatory landscape and has sparked both anticipation and debate within the crypto industry and beyond.

Lipika Deka: Lipika is a crypto-journalist at TWJ. A graduate in economics and finance, she has a keen interest in the political and socio-economic facets of blockchain technology and the cryptocurrency industry.