Lawmakers in the European Union approve yet another crypto-related legislation.
The European Parliament, the legislative branch of the European Union, has given a resounding approval to DAC8, an update in the Directive on Administrative Cooperation focusing on tax reporting of cryptocurrency transactions.
This decisive vote on September 13th removes the final barrier to the regulation's formal adoption.
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In a plenary session held in Strasbourg, an overwhelming majority of members voted in favor of the directive, with a minority of 57 against and 60 abstentions. This sweeping support means that EU member states have until December 31st, 2025, to enact DAC8's provisions, with the rules becoming operational starting January 1st, 2026.
The purpose of DAC8 is to empower EU tax authorities "to track the trade of crypto-assets and the proceeds gained, thereby reducing the risk of tax fraud and evasion."
This legislative approval follows the sanctioning of the Markets in Crypto-Assets (MiCA) law in May 2023. DAC8 is the eighth installment in a series of administrative cooperation directives, each addressing unique financial regulatory aspects.
The legislation has faced some criticism, particularly around its resemblance to the Crypto-Asset Reporting Framework (CARF) and its potential to limit the regulatory autonomy of individual EU states.
Earlier this year, the Chief Legal Officer at Blockpit, Max Bernt, expressed his reservations about DAC8. He specifically mentioned the challenges facing crypto-asset service providers (RCASPs) in determining which transactions must be reported. Bernt also voiced concerns about "duplicate reporting," given the evolving landscape of crypto regulations.
With the European Parliament's strong endorsement of DAC8, the directive is now set for official implementation, promising a more regulated and transparent landscape for cryptocurrency transactions within the EU. While the regulation aims to fortify tax compliance and deter fraud, it raises important questions about state sovereignty and potential administrative complications.
