The European Union’s newest tax transparency law for digital assets comes into force on January 1, marking a shift in how crypto activity faces scrutiny across the bloc.
Known as DAC8, the directive extends the EU’s long-standing framework for administrative cooperation on taxation to crypto-assets and related service providers. The rules require providers of cryptoassets, including exchanges and brokers, to collect and report detailed information about users and transactions to national tax authorities. These authorities then share the data across EU member states.
The move matters because it closes a loophole that left parts of the crypto-economy outside of standard tax reporting. Under DAC8, authorities will get a clearer view of crypto holdings, trades and transfers, mirroring the visibility that already applies to bank accounts and securities.
DAC8 operates alongside, but separately from, the EU’s Markets in Crypto-Assets (MiCA) regulation. Adopted in April 2023, MiCA governs how crypto companies obtain licenses, protect customers and operate across the single market. DAC8 aims at tax compliance and provides authorities with the data necessary to assess and enforce tax liabilities. MiCA regulates market behavior, while DAC8 controls the tax track.
The directive applies from January 1, but crypto companies have a transition period. Providers have until July 1 to bring reporting systems, customer due diligence processes and internal controls into full compliance. After this deadline, failure to report may trigger sanctions under national law.
For crypto users, enforcement has sharper consequences. If tax authorities detect avoidance or evasion, DAC8 allows local agencies to act with the support of counterparts in other EU countries. This cooperation includes the power to embargo or seize crypto-assets linked to unpaid taxes, even when assets or platforms are located outside of a user’s home jurisdiction.
