European Parliament Greenlights DAC8 for Crypto Tax Reporting with Overwhelming Majority
Effective January 1, 2026, cryptocurrency service entities operating within the EU will need to adhere to tax reporting obligations. The European Parliament recently gave the nod to DAC8, implementing tax reporting standards for crypto dealings throughout the European Union.
The legislative proposal sailed through with a commanding 535 votes in support, contrasted with 57 opposing and 60 abstaining. Thus, it’s poised to be integrated into the law.
Primarily, the DAC8 is an enhancement of the EU Directive on Administrative Cooperation (DAC). Its purpose is to mandate crypto-asset entities to keep tax authorities in the loop about transactions involving EU clients. The successful implementation of DAC8 will lead to a streamlined exchange of crypto asset data among the EU member states’ tax departments.
As per the European Commission’s calculations, the adoption of this comprehensive reporting mechanism for crypto assets across the EU could potentially augment tax inflows by an amount ranging from €1 to €2.4 billion yearly. This is corroborated by an assessment undertaken by the European Parliamentary Research Service (EPRS).
The EPRS’s assessment elaborates on the DAC8 mandate, drawing parallels with the OECD’s Common Reporting Standard (CRS). The mandate distinguishes between two primary reporting entities: those that render crypto-asset services to third parties (crypto-asset providers) and those that furnish crypto-asset services not typically provided by the former (crypto-asset operators). Both these categories, tagged as reportable crypto-asset service providers (RCASPs), fall within the ambit of the DAC’s tax reporting protocol, provided they cater to clients within the EU. This holds true regardless of the size of the RCASP or where they are based.
The rule is comprehensive, encapsulating all forms of crypto assets employed for investment and transactional reasons. It also takes into account e-money, e-money tokens, and central bank digital currencies (CBDCs). The purview of reportable transactions by RCASPs extends to exchanges and transfers of applicable crypto-assets, which includes trading such assets for traditional fiat currencies and crypto-to-crypto exchanges.
Given the detailed guidelines, there’s a provision to kickstart the reporting process by January 1, 2026, ensuring adequate preparatory time, particularly considering the impending MiCA regulations.
