EU makes progress on plan to share cryptocurrency tax data
The E.U.’s Digital Finance Package proposal, known as DAC8, has recommended that crypto asset service providers report their clients’ transactions to help combat tax-related criminal activities such as tax evasion.
This move is part of the E.U.’s effort to tighten regulations on cryptocurrency and bring them in line with traditional financial services.
The DAC8 amendment
Under the commission’s proposal unveiled in December, companies that have E.U. clients must register in the bloc and report digital assets, including crypto and some non-fungible tokens (NFTs), to tax authorities to tackle tax evasion through digital assets, aligning with similar moves by the Organization for Economic Cooperation and Development (OECD).
The director of the commission’s tax department, Benjamin Angel, tweeted about unanimous support for the DAC8 amendment, which was introduced in December 2020 and recently gained support from E.U. ambassadors. This comment was made in reference to the regular meeting for economic and finance ministers that is set to take place in Belgium on May 16.
The E.U.’s proposed DAC8, which calls for crypto asset service providers to report client transactions to counter tax-related crimes, has received support from ambassadors and could come into effect before the Crypto-Asset Reporting Framework (CARF) in early 2026, pending approval from the Council of Economic and Financial Affairs.
An attempt to curb tax evasion
In an effort to prevent tax evasion through cryptocurrencies, the European Commission proposed an eighth amendment to the Directive on Administrative Cooperation (DAC8) last year, which expanded an existing law aimed at preventing taxpayers from hiding taxable assets in overseas bank accounts.
The proposal was subject to potential veto by any of the E.U.’s 27 member countries who make up the E.U. council. Discussions on the bill were held behind closed doors by the council, and a draft of the agreed-upon text has not yet been published.
However, the latest news reports that the new rules allowing tax authorities to share data about trader’s crypto holdings have been unanimously supported by member states of the E.U., indicating that formal agreement on the law is likely to be reached soon.
#progress #plan #share #cryptocurrency #tax #data