EU’s DAC8 Proposal for Enhanced Crypto Asset Reporting Receives Wide Support

EU's DAC8 Proposal for Enhanced Crypto Asset Reporting Receives Wide Support

Crypto News: EU’s DAC8 Proposal for Enhanced Crypto Asset Reporting Receives Wide Support

The European Union’s Digital Finance Package, commonly referred to as DAC8, has received widespread support for its recommendation that crypto asset service providers report client transactions.

This move seeks to combat tax-related criminal activities, including tax evasion, and aligns the regulation of cryptocurrencies with traditional financial services.

The proposed DAC8 amendment, unveiled by the European Commission in December, requires companies with EU clients to register within the bloc and disclose digital assets, such as cryptocurrencies and select non-fungible tokens (NFTs), to tax authorities.

The objective is to address tax evasion facilitated by digital assets, following in the footsteps of similar measures introduced by the Organization for Economic Cooperation and Development (OECD).

Benjamin Angel, Director of the Commission’s tax department, expressed his enthusiasm on social media as he announced unanimous support for the DAC8 amendment. The endorsement from EU ambassadors comes ahead of the regular meeting for economic and finance ministers scheduled to take place in Belgium on May 16.

The EU’s DAC8 proposal, aiming to mandate crypto asset service providers to report client transactions as a measure against tax-related crimes, has garnered significant support and may come into effect earlier than the Crypto-Asset Reporting Framework (CARF), potentially as early as the beginning of 2026. Final approval from the Council of Economic and Financial Affairs is still pending.

Combatting Tax Evasion with Determination

In an effort to curb tax evasion through cryptocurrencies, the European Commission introduced the eighth amendment to the Directive on Administrative Cooperation (DAC8) last year. This amendment expands an existing law that aims to prevent taxpayers from concealing taxable assets in offshore bank accounts.

Throughout the progression of the DAC8 proposal, there was the potential for any of the EU’s 27 member countries, which constitute the EU council, to veto the amendment. Discussions surrounding the bill were conducted confidentially, and the final draft of the agreed-upon text has yet to be publicly disclosed.

However, recent reports indicate that the new regulations enabling tax authorities to share information about traders’ crypto holdings have received unanimous support from EU member states. This development suggests that formal agreement on the legislation is imminent.

The proposed DAC8 amendment underscores the EU’s commitment to tightening regulations surrounding cryptocurrencies, aligning them with traditional financial frameworks. By promoting transparency and accountability within the crypto industry, the EU aims to enhance the integrity of the financial system while effectively combating tax evasion.

Related News: New York State Introduces Bill to Accept Fiat-Collateralized Stablecoins for Bail Payments

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