Did you know that if you bought one Bitcoin in 2013 for $100, it would’ve been worth over $60,000 less than a decade later? This explosive growth is just one reason why tax authorities across the world have started paying very close attention to crypto assets.
What began as a niche experiment in digital money has become a global financial force. From Bitcoin and Ethereum to NFTs, cryptocurrencies are now held by millions of individuals and institutions. But as crypto adoption grew, so did concerns about tax evasion, unreported gains, and regulatory blind spots.
Like the profits made from traditional investments such as stocks or property, profits made from buying and selling crypto are usually subject to capital gains tax. However, for years, the anonymous and borderless nature of crypto made it difficult for governments to track these gains or ensure compliance.
As a result, international bodies and national governments—especially in the EU—have moved to tighten the net. The latest and most ambitious effort is DAC8, a new EU directive aimed at making crypto tax reporting more transparent and coordinated across Member States.
The whole premise of crypto was once anonymity, but tax authorities are catching up. With DAC8, the EU is tightening its grip on digital asset transparency. Here's what that means for investors and platforms alike.
What is DAC8?
The newly amended Directive on Administrative Cooperation (DAC8) requires crypto trades to be reported to EU tax authorities by Reporting Crypto-Asset Service Providers (RCASPs). These are platforms that facilitate crypto transactions—examples include Coinbase, Crypto.com, and Bitstamp.
Because many large RCASPs have offices in the EU, they are now bound by DAC8. This means EU Member States can collect information from RCASPs and share it with the taxpayer’s country of residence.
A cross-border example
Imagine Joe, who lives in Austria but trades crypto on a platform based in Romania. Austria wants to tax Joe’s income, but unless Romania shares that information, Austria may never know Joe made those gains.
To solve this problem, mechanisms like the Automatic Exchange of Information (AEOI) were developed. DAC8 expands AEOI to cover crypto, requiring platforms to collect, verify, and share data about users and their trades—even across borders.
When does DAC8 apply?
- Adopted: 17 October 2023
- Published: 24 October 2023
- Transposition Deadline: 31 December 2025
- Application Date: 1 January 2026
What does DAC8 require?
The new DAC8 introduces two core obligations:
- Crypto service providers must collect and verify user and transaction data, then report it to their local tax authority.
- That local tax authority must forward the data to the tax authority in the user’s country of residence.
Additionally, reportable users (i.e., anyone in the EU trading crypto through a platform) will have personal and transactional information reported. This includes:
- Name, address, and TIN (Tax Identification Number)
- Values of crypto assets from acquisition to disposal
Penalties for non-compliance
- €50,000 minimum fine for RCASPs with turnover under €6 million
- €150,000 minimum fine for RCASPs with turnover over €6 million
- €20,000 minimum fine for individuals who fail to comply
Why DAC8 matters
DAC8 is a game-changer for EU crypto taxation. By bringing crypto into the regulatory fold, it addresses key gaps and creates a fairer playing field between traditional and digital finance.
Tax fairness is a core principle. If crypto users don’t report their gains while others pay tax on salaries or stocks, trust in the system erodes. DAC8 promotes compliance, deters evasion, and improves cross-border enforcement.
For investors, this means more rigorous reporting and recordkeeping. For governments, it means billions in potential new revenue. The European Commission estimates DAC8 could generate between €1 and €2.4 billion annually across the EU.
While DAC8 may dampen crypto’s “wild west” reputation, one truth stands out:
What happens in your wallet no longer stays in your wallet.
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