Key Takeaways
- All EU member states now support the Directive on Administrative Cooperation (DAC8), a crypto-tax framework to reduce tax evasion.
- The proposed framework will increase oversight of crypto exchanges, markets, and other crypto-related services.
- DAC8 will be compatible with other EU crypto laws, as well as OECD guidelines on the proper implementation of crypto-tax regulation.
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The European Commission is moving towards an EU-wide agreement, called the Directive on Administrative Cooperation (DAC8), to prevent tax evasion and better track crypto transactions within EU borders.
Building on the existing legislation, the new amendment “will expand the reporting and exchange of information between tax authorities within the European Union to cover income or revenue generated by users residing in the EU while operating with of crypto-assets.”
EU Commissioner and tax director Benjamin Angel took to Twitter on Wednesday to celebrate the massive support for DAC8:
EU ambassadors unanimously supported the DAC8, paving the way for ECOFIN’s adoption next week. Congratulations to the Swedish Presidency!
— Benjamin Angel (@benjaminangelEU) May 10, 2023
First developed and presented by the EU Commission on December 8, 2022, the framework proposes “new tax transparency rules for all service providers that facilitate crypto-assets transactions for customers who live in the European Union.” The final negotiations will take place in the European Parliament later in May 2023.
DAC8 will help EU tax authorities monitor EU residents who hold crypto in hard-to-find places, often abroad, without EU authorities being able to detect them. The legislation will also require crypto-asset service providers, such as exchanges and markets, to report customer transactions, as well as give EU authorities more powers to monitor holders of over 1 million euros in high-yield assets.
The change is in line with previous crypto-tax policies proposed by the Organization for Economic Co-operation and Development (OECD), which seeks to regulate crypto-tax reporting based on the proposals of member countries of EU.
The OECD released a proposal on new crypto tax reporting rules on March 22, 2022, called the Crypto-Asset Reporting Framework (CARF), in an attempt to standardize the international exchange of data on crypto-related transactions between tax authorities and crypto-asset services. providers.
The OECD approved the CARF in August 2022 and presented the revised standard to the central bank governors of the G20.
