The European Union’s latest law on tax transparency for digital assets takes effect on January 1, marking a shift in how crypto activity is subject to scrutiny across the bloc.
Known as DAC8, the directive extends the EU’s long-standing administrative cooperation framework on taxation to crypto assets and associated service providers. The rules require crypto-asset service providers, including exchanges and brokers, to collect and report detailed information about users and transactions to national tax authorities. These authorities then share the data between EU member states.
The move is important because it closes a loophole that left parts of the crypto economy outside of standard tax reporting. Under DAC8, authorities gain a clearer view of crypto holdings, transactions and transfers, which mirrors the visibility already applied to bank accounts and securities.
DAC8 operates alongside, but separately from, the European Markets in Crypto-Assets (MiCA) Regulation. MiCA, adopted in April 2023, governs how crypto companies obtain licenses, protect their customers and operate in the single market. DAC8 targets tax compliance, providing authorities with the data needed to assess and enforce tax obligations. The MiCA regulates market conduct, while the DAC8 controls the tax trail.
The directive applies from January 1, but crypto companies have a transition period. Suppliers have until July 1 to fully comply with their reporting systems, customer due diligence processes and internal controls. After this deadline, failure to report may result in sanctions under national law.
For cryptocurrency users, enforcement brings more serious consequences. If tax authorities detect evasion or fraud, DAC8 allows local agencies to act with the support of their counterparts in other EU countries. This cooperation includes the power to embargo or seize crypto assets related to unpaid taxes, even when the assets or platforms are located outside of the user’s home jurisdiction.
