- DAC8 mandates that crypto exchanges declare their clients’ holdings to tax authorities.
- The paper will be published in the Official Journal of the European Union.
The crypto community witnessed the official adoption by European Union finance ministers of new guidelines allowing for the sharing of information between tax agencies about individuals’ crypto holdings. The paper will be published in the Official Journal of the European Union and will become effective 20 days later.
EU member states unanimously supported the measures after they were presented last year to prevent assets from being hidden offshore via crypto, despite deliberations taking place mostly behind closed doors.
Combating Tax Fraud
On Tuesday, it was confirmed that the laws apply to stablecoins, NFTs, DeFi tokens, and the revenues from crypto staking, all of which were shown in a copy of the draught bill back in May. The Eighth Directive on Administrative Cooperation (DAC8) mandates that cryptocurrency exchanges declare their clients’ holdings to tax authorities.
The Commission said in a statement:
“The directive will improve Member States’ ability to detect and combat tax fraud, avoidance and evasion, by requiring all EU-based crypto-asset service providers, regardless of their size, that they report transactions from customers residing in the EU.”
Further, it said that the regulations’ application to financial institutions has been broadened with regard to electronic money and CBDC from previous iterations.
Furthermore, the European Union (EU) markets watchdog European Securities and Markets Authority (ESMA) announced in a statement that investors would not be covered by EU laws governing the crypto asset market until the end of 2024.
Moreover, on October 13th, the G20 finance ministers met in Morocco and approved a regulatory road map for crypto assets suggested by the Financial Stability Board (FSB) and the IMF.
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