The European Union’s new tax transparency law for digital assets comes into effect on January 1, marking a change in the way crypto activity faces scrutiny across the bloc.
Known as DAC8, the directive extends the EU’s long-standing framework for administrative cooperation on tax matters to crypto assets and related service providers. The rules require cryptoasset service providers, including exchanges and brokers, to collect and report detailed information about users and transactions to national tax authorities. Those 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. With DAC8, authorities gain a clearer view of cryptocurrency holdings, transactions and transfers that mirror the visibility already applied to bank accounts and securities.
DAC8 operates alongside the EU’s Cryptoasset Markets (MiCA) regulation, but separately. MiCA, approved in April 2023, regulates how crypto companies obtain licences, protect customers and operate in the single market. DAC8 targets tax compliance, providing authorities with the data necessary to assess and enforce tax obligations. MiCA regulates market conduct, while DAC8 monitors the tax trail.
The directive applies from January 1, but crypto companies have a transition period. Suppliers have until July 1 to bring reporting systems, customer due diligence processes and internal controls into full compliance. After that period, failure to submit reports may lead to sanctions under national law.
For cryptocurrency users, enforcement carries more serious consequences. If tax authorities detect avoidance or evasion, DAC8 allows local agencies to act with the support of their counterparts in other EU countries. That cooperation includes the power to seize or confiscate crypto assets linked to unpaid taxes, even when the assets or platforms are located outside a user’s home jurisdiction.
