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EU Enforces New Crypto Tax Rules with DAC8 Directive

The Eighth Directive on Administrative Cooperation (DAC8) expands the scope of cryptocurrency tax regulations to cover various types of crypto-assets.

The EU's DAC8 Directive enforces new crypto tax rules.
Copyright: 2021. Credit: Visualistka/Shutterstock

BRUSSELS, BE – In a pivotal move, the EU has taken a significant stride in regulating the cryptocurrency market with the adoption of the Eighth Directive on Administrative Cooperation (DAC8).


The DAC8 is set to be effective 20 days after its publication in the Official Journal, this directive has far-reaching implications for the burgeoning digital asset landscape.


DAC8


At the heart of the DAC8 directive is its ambitious scope, aimed at bolstering cooperation between national taxation authorities and infusing transparency within the crypto sector.


DAC8 seeks to widen the legislative framework to encompass various categories of assets and income, with a particular focus on crypto-assets. The extension of the regulatory framework reflects the EU's commitment to adapting to the rapidly evolving digital economy.


A salient feature of the directive is its mandate for crypto-asset service providers to automatically share data with tax authorities. This data sharing entails detailed information on transactions involving crypto-assets and the income derived from these transactions. Given the decentralized nature of crypto-assets, effective tax compliance necessitates seamless international cooperation among EU member states.


Covering All Crypto Assets


DAC8 is all-encompassing in its purview, adopting a broad definition of crypto-assets in alignment with the regulatory framework outlined in the Markets in Crypto-Assets (MiCA) regulations. This means that the directive covers a wide spectrum of digital assets, ranging from popular cryptocurrencies like Bitcoin and Ethereum to stablecoins, e-money tokens, and even certain non-fungible tokens (NFTs).


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