DAC8 extends tax reporting procedures to crypto transfers in line with the OECD crypto reporting framework and EU AML rules.
The European Council has approved updated rules that extend tax reporting requirements to include transfers of crypto assets. This is the eighth version of the Directive on Administrative Cooperation (DAC), which is a set of procedures for automatic information sharing between European governments for tax purposes.
DAC8 was proposed in December and approved on May 16 after the passage of Markets in Crypto-Assets (MiCA) since it depends on definitions established in that legislation. The new DAC adheres to the Crypto-Asset Reporting Framework (CARF) and amendments to reporting standards published by the Organisation for Economic Cooperation and Development (OECD) in October under a G20 mandate.
Related: What’s next for EU’s crypto industry as European Parliament passes MiCA?
DAC8 requires crypto asset service providers (CASPs) to collect information on crypto asset transfers of any amount to ensure traceability and identify suspicious transactions. It strengthens the European Union’s Anti-Money Laundering and Countering Terrorism Financing (AML/CFT) rules and proposes the creation of a new European AML body. The proposed regulation requires that CASPs:
The proposed regulation further explains: “The information should be submitted in a secure manner and in advance of, or simultaneously or concurrently with, the transfer of crypto-assets.”
In addition to the new requirements for CASPs, DAC8 includes new reporting rules relating to high-income individuals and tougher requirements for communicating Tax Identification Numbers.
We welcome the political agreement reached by EU Finance Ministers today on new tax transparency rules on the crypto-asset sector.
The Directive will improve EU countries’ ability to detect and counter tax fraud, tax evasion and tax avoidance.
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Swedish Finance Minister Elisabeth Svantesson said in a statement:
Changes to the DAC are not made through legislation but through a consultation process among the member states of the European Council.
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