EU Parliament Passes DAC8 Crypto Tax Reporting Rule with Strong Majority

In a decisive move, members of the European Parliament demonstrated strong support for the eighth installment of the Directive on Administrative Cooperation (DAC8), a pivotal cryptocurrency tax reporting rule, during a plenary session held on September 13.

Convened in Strasbourg, France, this session witnessed DAC8 garner an impressive 535 member votes in favor, with a mere 57 dissenting votes and 60 abstentions. This significant backing underscores the importance placed on DAC8 within the European Union (EU).

According to official EU documents, DAC8 is designed to empower tax authorities by granting them the necessary tools to monitor and evaluate all cryptocurrency transactions conducted by both individuals and organizations within the EU member states. The primary aim is to establish a comprehensive reporting framework that obligates crypto-asset service providers to report transactions involving EU clients. This initiative is poised to aid tax authorities in tracking crypto-asset trading and the resulting gains, thereby mitigating the risks associated with tax fraud and evasion.

The resounding support in the September 13 plenary session marked the final step before the formal enactment of DAC8. EU member states have been given until December 31, 2025, to implement the rules, with DAC8 slated to officially take effect on January 1, 2026.

This development follows the approval of DAC in May 2023, subsequent to the passage of the Markets in Crypto-Assets (MiCA) legislation. The “8” in DAC8 signifies its eighth iteration, with each prior directive addressing distinct aspects of financial oversight.

In its present form, DAC8 adheres to the Crypto-Asset Reporting Framework (CARF) and aligns with the provisions outlined in MiCA. It is poised to encompass all cryptocurrency asset transactions conducted within the EU.

However, some critics of DAC8 argue that it lacks substantial differentiation from CARF and diminishes the authority of individual member states in overseeing cryptocurrency activities.

Max Bernt, the Chief Legal Officer at Blockpit, expressed concerns earlier this year. He pointed to issues regarding the obligation of reporting crypto asset service providers (RCASPs) to individually determine the reportability of transferred crypto assets. Additionally, he raised apprehensions about the potential for “duplicate reporting” as lawmakers navigate the complexities of existing regulations and those slated for implementation.

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