European Council Expands Tax Reporting to Crypto Transfers Under DAC8
The European Council has officially approved updated tax reporting rules that extend to crypto asset transfers, marking a new phase in the European Union’s push for financial transparency. The approved framework, known as DAC8, represents the eighth version of the Directive on Administrative Cooperation — a set of EU-wide rules for automatic information sharing among member states.
DAC8, proposed in December and approved on May 16, follows the adoption of the Markets in Crypto-Assets (MiCA) regulation. The directive aligns closely with the Crypto-Asset Reporting Framework (CARF) and reflects updated standards from the Organisation for Economic Cooperation and Development (OECD), as mandated by the G20.
Stricter Oversight for Crypto Service Providers
Under DAC8, crypto asset service providers (CASPs) must collect and report detailed information on all crypto asset transfers, regardless of amount. This data aims to improve traceability, identify suspicious transactions, and reinforce the EU’s Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) efforts.
The new rules require CASPs to ensure that each crypto transfer includes the beneficiary’s name, distributed ledger address, and, where applicable, account number. These details must be submitted securely and either before or simultaneously with the transfer.
By aligning with the CARF and MiCA definitions, the directive ensures consistency across EU jurisdictions, offering a unified framework for compliance and enforcement.
Strengthening EU AML and Tax Transparency
DAC8 not only enhances the traceability of crypto transactions but also introduces stricter reporting obligations for high-income individuals and improves the communication of Tax Identification Numbers (TINs).
The European Commission stated that the new rules will “improve EU countries’ ability to detect and counter tax fraud, tax evasion, and tax avoidance.”
Swedish Finance Minister Elisabeth Svantesson emphasized the impact of the directive, saying:
“Today’s decision is bad news for those who have misused crypto-assets for their illegal activities, to circumvent EU sanctions or to finance terrorism and war. Doing so will no longer be possible in Europe without exposure.”
Implementation Through Coordination
Unlike traditional legislation, changes to the DAC are implemented through a consultation and coordination process among EU member states. This ensures flexibility while maintaining a harmonized approach to tax cooperation and financial oversight.
Toward a Transparent Crypto Market
The adoption of DAC8 marks another major step in the EU’s comprehensive regulatory overhaul of the crypto industry. Following MiCA’s passage, the directive underscores Europe’s determination to lead in responsible blockchain regulation, balancing innovation with accountability.
Once fully implemented, DAC8 will make Europe one of the most transparent regions globally for crypto activity, requiring all service providers to operate under strict anti-fraud and tax reporting standards.
