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Tax regulations in the EU: DAC8

June 15th, 2023

European Union regulations on crypto-assets are getting more updates:
Tax transparency regulations for transactions related to crypto-assets.
DAC8 requires MiCA-regulated crypto-asset service providers to report.

What does DAC8 mean?

The “Directive on Administrative Cooperation” (DAC) is the main mechanism by which tax officials within the European Union share information with one another.
The term “DAC8” refers to the eighth change, which is the latest modification.

What is the content?

The crypto-asset sector is going to change the way people value and spend their assets.
It is difficult for tax authorities to track the capital gains from crypto trading.
On December 8, 2022, the European Commission proposed a reporting mechanism.
This will require crypto asset providers to report transactions made by customers in the EU.
It will make it easier for tax authorities to track the sale of crypto assets and the proceeds.
Tax fraud and tax evasion will become less likely, but it will also give full control authority over every crypto transaction.
After the European Parliament and the European Economic and Social Committee give their votes, all members of the Council must endorse the legislation.
Customs regulations allow crypto-assets to be traded on the EU market and respect national regulations on supply, transactions, and storage.
At the May 16, 2023, Economic and Financial Services Commission meeting, the Council laid out the plan for implementing the proposal.
‘EU legislation in progress’ reports update key points in the regulatory framework.

Penalties

The Commission wants to set a minimum amount of penalties for the whole DAC, not just for DAC8.
If more than 25% of a person’s or entity’s report contains missing, wrong, or false information, Member States should impose minimum financial penalties by making a difference between who is paying the penalty and how much money they make.

When do the rules apply?

Member states have until December 31, 2025, at the latest, to pass and print the laws, regulations, and administrative rules they need to follow this DAC8.
It will go into effect on January 1, 2026.
DAC8 applies to every EU member nation.

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