EU Parliament Passes DAC8 Crypto Tax Reporting Rule – Forbes India
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Image: ShutterstockThe European Parliament has overwhelmingly voted in favour of DAC8, a legislative measure introducing comprehensive tax reporting requirements for crypto transactions across the European Union (EU). With 535 votes in favour, 57 against, and 60 abstentions, the proposed rule is set to become law.DAC8, designed to amend the EU Directive on Administrative Co-operation (DAC), obligates crypto-asset service providers to report transactions involving EU clients to the tax authorities of EU member states. This move aims to facilitate the automatic exchange of crypto asset information among EU tax authorities.The European Commission foresees that implementing this EU-wide crypto-asset reporting framework could generate additional tax revenue ranging from €1 billion to €2.4 billion annually, as indicated in an impact assessment report by the European Parliamentary Research Service (EPRS).The directive closely aligns with the OECD’s (Organisation for Economic Co-operation and Development) common reporting standard (CRS). It identifies two categories of entities required to report information to local authorities: crypto-asset providers and crypto-asset operators. These entities, categorised as reportable crypto-asset service providers (RCASPs), must comply with DAC’s reporting requirements if they have users within the EU, regardless of their size or location.It also encompasses all crypto assets usable for investment and payment purposes, including e-money, e-money tokens, and central bank digital currencies (CBDCs). Reportable transactions by RCASPs cover a broad spectrum, including crypto-asset exchanges, transfers involving fiat currencies, and transactions between various crypto assets.DAC8 is set to take effect on January 1, 2026, allowing ample time for regulatory preparation and implementing Markets in Crypto-Assets (MiCA) regulations. MiCA paved the way for the approval of DAC in May 2023 and represents the eighth iteration, addressing distinct aspects of financial oversight.In its current form, DAC8 aligns with the Crypto-Asset Reporting Framework (CARF) and MiCA legislation, comprehensively covering all crypto-asset transactions within the EU. EU member states now have time until December 31, 2025, to incorporate these rules before DAC8’s official enactment on January 1, 2026.The adoption of DAC8 underscores the EU’s commitment to regulating and taxing crypto transactions, positioning the region as a proactive participant in the ever-evolving crypto landscape. Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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