This requirement is a must, according to the European Parliament, which has just validated a new common standard, the DAC8
Last May, the Council of Europe agreed on cooperation between the tax authorities of the different countries of the Union. Registration and reporting obligations will therefore be expanded and clarified to include cryptoassets. In this regard, Swedish Finance Minister Elisabeth Svantesson stated the following:
“We strengthened administrative cooperation rules and closed loopholes that were previously used to avoid income tax. This reduces the risk of cryptoassets being used as a safe haven. for the purposes of fraud and tax evasion.”
How Cryptocurrency Taxes Are Made
To understand DAC Directive 8, one must begin with a review of the fiscal responsibility of cryptocurrencies. Every holder of crypto assets must pay taxes on the profits obtained. It can be a tax on variable income or a flat tax on capital gains, depending on the country in which the holder has his tax residence. There may even be a holding period after which the gains become tax-free.
Regulations vary greatly between EU Member States, but they all have something in common: the holder of cryptoassets must declare profits to the tax authorities, just like with any other asset.
Traditional finance has additional reporting obligations. Thus, not only individual owners must declare their profits, but also the financial institutions that store the assets. Banks even collect capital gains tax on their clients’ holdings and turn it over to the tax authorities.
“The double declaration – of both individuals and institutions – makes sense,” says Dr. Max Bernt, legal director of Blockpit. “Until now, the obligation to declare taxes related to cryptocurrencies fell on the willingness of the asset owner to provide that information. Having institutions report their clients’ tax data creates an intelligent system of checks and balances.”
A key element of the DAC8 regulation will be to add the institutional declaration to the regulations of the EU Member States.
The DAC8 Regulation in Process in the European Union
The new directives, called “DAC8” exist along the MiCA regulations, which govern cryptocurrencies in the European Union. The DAC8 is the declarative aspect, meaning that the tax services of all the countries of the European Union will commit to following the same rules.
On September 13 in Strasbourg, the European Parliament voted in favor of validating this new framework by a very large majority: 535 votes in favor and 57 votes against (60 abstentions). The DAC8 will allow tax authorities to monitor and obtain information on all cryptocurrency transactions carried out by organizations located in Member States.
Horizon 2026 in Sight
The Parliament vote was the last step to validate the DAC8. From now on, Member States have until December 31, 2025 to implement these new rules. They will come into force on January 1, 2026. In France, the measures tighten existing reporting obligations.
Currently, French individuals are required to declare their taxable transactions, that is, their capital gains. Application of DAC8 will therefore add surveillance of businesses and all operations, even simple transfers and crypto-crypto exchanges.
These new directives are framed in a context of increasing surveillance of cryptocurrency operations in Europe. Tightening reporting obligations therefore shows a democratization of the sector, but also adds difficulties for operators, who will be faced with extremely large amounts of data to report.
By Audy Castaneda
