The Mystery of DAC8 and EU Tax Regulations for Crypto-assets

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🔸 Unlock the mystery of DAC8. ▫️ Tax regulations in the EU. 🧵 Thread #44👇

▫️ EU regulations on crypto-assets are getting more updates. DAC8 is the Tax Transparency Rule for Crypto Assets. MiCA crypto-asset service providers must report. twitter.com/wssounddesign/status/1650834866710409216

▫️ tl;dr EU tax officials share information through the DAC, with DAC8 being the newest change. It will make it easier for tax authorities to track crypto assets. Lost, incorrect, or misleading information will cost a penalty

▫️ What does DAC8 mean? The "Directive on Administrative Cooperation" (DAC) is the main way EU tax officials share information. The term “DAC8” refers to the eighth change, which is the latest modification.

▫️ What is the content? It is difficult for tax authorities to track the capital gains from crypto trading. The European Commission proposed DAC8 on December 8, 2022, requiring crypto asset providers to report EU consumer transactions.

This will make it easier for tax authorities to track the sale of crypto assets and the proceeds. Tax fraud and evasion will decrease, but crypto transactions will be fully controlled.

▫️ Penalties The Commission will set a minimum amount of penalties for the whole DAC, not just for DAC8. Member States should impose minimum financial penalties if 25% of a report contains missing, wrong, or false information.

▫️ When do the rules apply? Member states must approve and print DAC8-compliant laws, regulations, and administrative rules by December 31, 2025. It will go into effect on January 1, 2026. DAC8 applies to every EU member nation.