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The European Union's Council of Ministers (the Council) has reached agreement on the draft DAC8 directive on administrative cooperation in the area of taxation, amending the existing directive to require reporting and automatic exchange of information (AEOI) on revenues from crypto-asset transactions.

From 2026, crypto-asset service providers will have to conduct due-diligence procedures on clients and report to EU Member States' tax authorities on a broad range of crypto-asset transactions, including stablecoins, e-money tokens and certain non-fungible tokens. These 'travel rule' reports will then be automatically shared with other Member States' tax authorities, as is already done for conventional asset transactions under previous versions of the directive. No minimum threshold has been set for the size of transactions to be reported under a regulation adopted by the Council at the same time.

According to the Council, the amended directive is needed because the decentralised nature of crypto-assets has made it difficult for Member States' tax administrations to ensure tax compliance. 'The inherent cross-border nature of cryptoassets requires strong international administrative cooperation to ensure effective tax collection', it says.

The amended directive is based on the European Commission's draft proposal of December 2022, and reflects the Crypto-Asset Reporting Framework (CARF) and a set of amendments to the Common Reporting Standard (CRS) prepared by the OECD under the mandate of the G20 group of countries. Unusually, it does not require approval by the European Parliament, and can be implemented by unanimous agreement of Member States alone.

The new directive will also extend the scope of the current rules on exchange of tax-relevant information by including provisions on exchange of advance cross-border rulings concerning high-net-worth individuals, as well as provisions on AEOI on non-custodial dividends and similar revenues. The Council says the current provisions of DAC do not cover this type of income. In particular, the proposal seeks to improve the rules on reporting and communication of the Tax Identification Number (TIN) to help tax authorities identify the relevant taxpayers and their liabilities. It introduces new penalties that Member States can impose on persons who fail to comply with national legislation on reporting requirements.

Original post:
European Union reaches final position on crypto-transaction ... - STEP