DAC8 extends tax reporting proceedings to crypto transfers in line with the OECD crypto reporting frame and EU AML regulations.

The European Council has approved updated regulations that lengthen tax reporting necessities to include transfers of crypto assets. This is the eighth version of the Directive on Administrative Cooperation (DAC), which is a set of procedures for automatic data sharing between European governments for tax purposes.

DAC8 was offered in December and approved on May 16 after the passage of Markets in Crypto-Assets (MiCA) since it depends on definitions established in that legislation. The new DAC adheres to the Crypto-Asset Reporting Framework (CARF) and amendments to reporting norms issued by the Organisation for Economic Cooperation and Development (OECD) in October under a G20 mandate.

Related: What’s next for EU’s crypto industry as European Parliament passes MiCA?

DAC8 requires crypto asset service providers (CASPs) to collect data on crypto asset transfers of any quantum to ensure traceability and identify suspicious deals. It strengthens the European Union’s Anti-Money Laundering and Fighting Terrorism Financing (AML/CFT) regulations and proposes the creation of a new European AML body. The proposed rule requires that CASPs:

“Ensure that transfers of crypto-assets are accompanied by the name of the beneficiary, the beneficiary’s distributed ledger address, in cases where a transfer of crypto-assets is registered on a network using DLT or similar technology, [and] the beneficiary’s account number, in cases where such an account exists.”

The offered rule explains “ The data should be submitted in a secure manner and in the advancement of, or simultaneously or concurrently with, the transfer of crypto-assets. ”

In addition to the new necessities for CASPs, DAC8 includes new reporting regulations relating to high-income individualities and tougher necessities for communicating Tax Identification figures.

Swedish Finance Minister Elisabeth Svantesson spoke in a statement:

“Today’s decision is bad news for those who have misused crypto-assets for their illegal activities, to circumvent EU sanctions or to finance terrorism and war. Doing so will no longer be possible in Europe without exposure.”

Inconstancies to the DAC aren't made through legislation but through a consultation process among the element states of the European Council.

(DEREK ANDERSEN, Cointelegraph, 2023)