The European Union’s digital finance package proposal, known as DAC8, recommended that crypto-asset service providers report their customers’ transactions to help combat tax-related criminal activities such as tax evasion.
The move is part of the European Union’s efforts to tighten regulations for cryptocurrencies and bring them in line with traditional financial services.
DAC8 modulation
Under the Commission’s proposal unveiled in December, companies with EU customers must register in the bloc and report digital assets, including cryptocurrencies and certain non-fungible tokens (NFTs), to tax authorities to tackle tax evasion through digital assets. , consistent with similar moves by the Organization for Economic Co-operation and Development (OECD).
The Commission’s Director of Taxation, Benjamin Engel, tweeted about the unanimous support for the DAC8 amendment, which was introduced in December 2020 and recently received the support of EU ambassadors. The comment was made in reference to the regular meeting of economy and finance ministers scheduled to take place in Belgium on May 16.
The EU-proposed DAC8, which calls on crypto-asset service providers to report customer transactions to counter tax-related offenses, has received support from ambassadors and could go into effect before the Crypto-Asset Reporting Framework (CARF) in early 2026, pending approval from the Council. Economic and financial affairs.
An attempt to reduce tax evasion
In an effort to prevent tax evasion through cryptocurrencies, the European Commission proposed an eighth amendment to the Administrative Cooperation Directive (DAC8) last year, which expanded existing law aimed at preventing taxpayers from hiding taxable assets in offshore bank accounts.
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The proposal was subject to a potential veto by any of the 27 EU member states that make up the Council of the European Union. Discussions on the bill were held behind closed doors by the council, and the agreed draft text has yet to be published.
However, the latest news reports that new rules allowing tax authorities to share data about traders’ crypto holdings have been unanimously supported by EU member states, indicating that a formal agreement on the law is likely to be reached soon.
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