As published on coindesk.com, Friday 12 May, 2023.
The European Union plans to force crypto companies to give tax authorities details of their clients' holdings, according to a draft bill released to CoinDesk under freedom of information laws.
The data-sharing law, based on a model from the Organization for Economic Cooperation and Development (OECD), is set to be agreed by finance ministers next week, and will allow tax authorities to share data within the 27-nation bloc. Commission officials have said the bill received unanimous acclaim at a meeting on Wednesday, though people familiar with the matter told CoinDesk that some finance ministers have not yet received formal approval from parliaments.
The bill, dated May 5, closely matches proposals made by the European Commission in December 2022, as part of a bid to stop EU residents stashing crypto abroad to hide it from the taxman. The commission would have to set up a register of crypto asset operators’ by December 2025, bringing forward a previous deadline by one year, and the rules will apply as of Jan. 1, 2026.
Controversially, the law – known as the eighth directive on administrative cooperation (DAC8) – still includes platforms for trading non-fungible tokens that can be used for payment or investment, and providers from outside the bloc that have EU clients.
Overseas crypto firms can report to foreign authorities that meet EU norms.