DAC8 in the EU: Crypto Transactions Now Reported to Tax Authorities

Feb 6
4 min read

Updated: Mar 9

The EU has applied total changes in how cryptocurrency transactions are monitored and taxed. Council Directive 2023/2226, widely known as DAC8, was adopted on 17 October 2023 and introduced obligations of mandatory reporting for crypto-asset service providers. Since January 1, 2026, brokers, exchanges, and custodians have to collect transaction data and share it with tax authorities in all member states.

What DAC8 Is and Why It Matters

With DAC8 explained practically, we can see that it represents the eighth amendment to the Directive on Administrative Cooperation in matters of taxation. This directive upgrades information exchange, which is aimed at covering crypto-assets, as they were viewed as a large gap in tax transparency. EU DAC8 crypto provisions are designed to operate outside conventional banking, targeting specifically digital assets. The scope of the regulation now captures any entity that facilitates exchanges between fiat currencies and crypto assets, also including centralized exchanges, custodial wallet providers, and DeFi protocols with indefinitable operators.

Taking a closer look, DAC8 noticeably mirrors OCED Crypto-Asset Reporting framework, which began operating in October 2022. Both regulations have similar definitions and allow EU tax authorities to share and exchange information with jurisdictions located outside the Union, due diligence requirements, adopting CARF rules. Previous directives covered bank balances and employment income, leaving crypto-assets basically invisible. And the new EU crypto tax reporting rules are closing this gap by requiring intermediaries to report transaction-level data.

Who Must Report Under DAC8

Licensed under Markets in Crypto-Assets, centralized exchanges carry straightforward obligations, technically, as they already collected identity documents for AML compliance. Now, DAC8 reporting requirements add to this scheme annual tax reporting, which requires aggregating user activity by the asset type. Custodial services that hold private keys of clients must also report. At the same time, self-custody solutions fall outside direct obligations unless an intermediary facilities of transaction.

According to DAC8 crypto tax reporting rules, on-ramp services and payment processors have to face reporting duties, even if they don't hold long-term assets. HQ geolocation does not determine applicability. Now, any operator may face a potential blocking measure in case a single member state registration is absent. DAC8 also totally covers Crypto-Asset Operators, which lack MiCA authorization, but provide services to users located in EU member states.

Who Is Reported and What Assets Are Covered

Persons which has an EU tax residence become reportable while conducting a qualifying transaction. Residency is determined through self-certification, which is usually the necessary part of the onboarding process. Corporate users also meet similar reporting, but with additional complexity, because platforms have to determine the person behind a legal entity. At the same time, entities that trade government bodies, shares, and most financial institutions qualify for exclusions.

The regulation's reporting requirements capture almost every token used for investments and payments. Most altcoins, such as Bitcoin, Ethereum, etc., especially fall within regulation scope. As for stablecoins, they remain regulated only if a specific token is stable enough to be recognised as low-risk e-money. NFTs held exactly for investment or payment are covered as well, though pure collectables may be excluded if the market doesn't demonstrate secondary-market activities.

Reportable Transactions and Data Collection

Sales of government-issued crypto-assets trigger mandatory reporting by the crypto-to-fiat EU-reporting rules. Platforms are required to record total value, transaction count, and, especially, specific assets involved for every single user annually. Crypto-to-Crypto, of course, falls within the reporting scope, while the platform calculates fair market value at the time of transactions. Personal wallet transactions also require reporting, helping tax authorities to track movements.

Platforms need to collect residential address, full legal name, individual's date and place of birth, as well as tax ID from each country of residence. This is a critical point. Users must confirm self-certification attesting to accuracy. Users must provide this documentation by January, 1, 2027. Reports are aggregated annually by asset type and user.

Timeline, Enforcement, and Consequences

EU member states transposed DAC8 into their national law by 31 December 2025, and the directives took effect on January 1, 2026, as mentioned. The calendar year of 2026 serves as the first period of reporting. This year, the regulation is supposed to be practically integrated into the legal system of the Union. That's why reports are submitted during 2027. Tax authorities will share the data around the EU using the CCN. France and Germany have already officially published implementing legislation with quite specific penalty regimes, including fines up to 2.5 million euros for commited violation.

Tax anonymity will shrink for users. Authorities will now have all detailed activity records, with cross-referencing against the income declared. Platforms now have to evaluate all necessary data collection particles against requirements. Transaction databases need aggregation logic for annual reporting.