DAC8: The New Era of Tax Transparency for Cryptocurrencies in the EU
If you are involved in the world of digital assets, you have surely heard of MiCA. But there is another regulation that is quietly going to change the rules of the game: DAC8.
In this article, we break down what it is, who it affects, and why it spells the end of fiscal ‘anonymity’ for crypto users in the European Union.
What exactly is DAC8?
DAC8 (Directive on Administrative Cooperation 8) is a European Union regulation designed to increase fiscal transparency.
Its main objective is simple: to ensure that the tax authorities of member countries know who owns which crypto assets. Until now, the exchange of information between countries on cryptocurrencies was limited, which facilitated tax evasion. With DAC8, that loophole is closed.
How does it work? The end of secrecy
The key to DAC8 is the automatic exchange of information.
- Reporting obligation: Crypto Asset Service Providers (CASP) such as Binance, Coinbase or Kraken will be required to collect data on the transactions of their customers residing in the EU.
- Communication between countries: If you live in the UK but use an exchange based in Ireland, Ireland will automatically send your trading data to the UK Tax Agency.
- Penalties: Member countries will impose severe fines on providers who fail to comply with this reporting requirement.
Which assets are under scrutiny?
It’s not just Bitcoin. DAC8 has a very broad scope:
- Cryptocurrencies: BTC, ETH and any altcoin.
- Stablecoins: Such as USDT or USDC.
- NFTs: Provided they are used for investment or payment purposes.
- E-money: Electronic money and central bank digital currencies (CBDCs).
Important note: The directive also covers transactions that occur outside the EU if the user resides within it.
The timeline: When does it come into effect?
Although the directive has already been approved, countries have some leeway to transpose it into their national laws.
- Implementation deadline: Most of the rules will start to apply from 1 January 2026.
- What does this mean? You have time to get your accounts in order, but tracking will be retroactive in the sense that the balances you have on that date will be the first to be reported.
How does this affect you as a user?
If you are a private investor, DAC8 does not change how much you have to pay, but how much the tax authorities know about you.
- Greater control: It will no longer be possible to ‘forget’ to declare earnings from a foreign exchange.
- Easier compliance (sometimes): With more data available, it is possible that in the future, tax drafts will already include crypto information, reducing manual errors.
- Privacy: This is the most controversial point. Users will have to accept that their financial data will be systematically shared between governments.
Conclusion
DAC8 is the missing piece in the European regulatory puzzle. Together with MiCA, it seeks to professionalise the sector and remove the ‘wild west’ stigma from cryptocurrencies. For the honest investor, it is just another formality; for those seeking opacity, the room for manoeuvre is over.
Need help with your tax return? Remember that this article is for informational purposes only and does not constitute financial or legal advice. Always consult a tax expert before making decisions about your assets.
Disclaimer: The information set forth herein should not be taken as financial advice or investment recommendation. All investments and trading involve risk and it is the responsibility of each individual to do his or her due diligence before making a decision.
