CoinDesk reported that with the official implementation of the EU's tax administration directive, 'DAC8 (Directive on Administrative Cooperation 8),' on January 1, cryptocurrency asset service providers will be required to report user information and transaction history to each country's tax authorities.
DAC8 applies across the EU, with the effective reporting deadline being July 1, 2026. Accordingly, cryptocurrency service providers, such as exchanges, custodians, and brokers, are required to submit customer identification information, transaction volumes, and asset movement details to tax authorities.
This measure is implemented concurrently with the EU's proposed cryptocurrency regulatory framework, Markets in Crypto-Assets (MiCA), but their regulatory objectives are different. While MiCA regulates market order and business practices, DAC8 focuses on tax reporting to prevent tax avoidance and evasion.
Of particular note is the strengthening of tax authorities' authority. If evidence of tax evasion or tax avoidance is confirmed, tax authorities will be empowered to freeze or seize cryptocurrency assets or related platforms, even if they are located outside the user's country of residence. This effectively extends tax enforcement power to cryptocurrency assets that cross national borders.
The industry believes that the implementation of DAC8 will significantly reduce the anonymity and autonomy of the EU cryptocurrency market. At the same time, some believe it will mark a turning point, as the cryptocurrency industry will be fully incorporated into the realm of tax regulation, requiring the same level of tax transparency as institutional finance.
The EU's latest move is likely to influence cryptocurrency taxation policies in other countries and regions in the future, foreshadowing significant ramifications for the global digital asset market.
