The European Union has recently passed a new law that obligates companies dealing in cryptocurrencies to share information about their clients’ holdings with tax authorities. This move aims to enhance transparency and oversight in the crypto market, ensuring compliance with tax regulations. The directive covers various aspects, including stablecoins, non-fungible tokens (NFTs), e-money tokens, and decentralized crypto-assets.
According to the European Council, there will be an automatic exchange of information between tax authorities, facilitated by the reporting crypto-asset service providers. The law, known as the Eighth Directive on Administrative Cooperation (DAC8), was initially proposed to the European Commission in December 2022. It is set to be officially published in the European Union’s Official Journal, the legal publication of the EU, and will become effective 20 days after its publication.
Johanna Store, a press officer for the European Council, mentioned that the directive will be published within the next two weeks, though the exact date is yet to be determined. DAC8 is designed to complement the Markets in Crypto-Assets (MiCA), the EU’s regulatory framework governing digital asset operations. MiCA necessitates that crypto firms and exchanges obtain licenses for operating within the bloc, while also mandating stablecoin issuers to maintain adequate reserves.
In a related development, the European Securities and Markets Authority (ESMA) released the second consultation paper on MiCA on October 5, 2023. This indicates continued efforts by the EU to establish comprehensive regulations for the rapidly evolving crypto landscape.
