As published on cryptobriefing.com, Thursday 11 May, 2023.
The European Commission is making progress toward an EU-wide agreement, called the Directive on Administrative Cooperation (DAC8), to curb tax evasion and better track crypto transactions within EU borders.
Building on top of existing legislation, the new amendment will “expand the reporting and exchange of information between tax authorities within the European Union to cover income or revenue generated by users residing in the EU while operating with crypto-assets.”
EU Commissioner and director of taxation Benjamin Angel took to Twitter on Wednesday to celebrate the overwhelming support of DAC8.
First developed and presented to the EU Commission on December 8, 2022, the framework proposes “new tax transparency rules for all service providers facilitating transactions in crypto-assets for customers resident in the European Union.” Final negotiations will take place in the European Parliament later in May 2023.
DAC8 will help EU tax authorities monitor EU residents who hold crypto in hard-to-find places, usually overseas, which would otherwise be unknown to EU authorities. The legislation will also require crypto-asset services providers, such as exchanges and marketplaces, to report customer transactions, as well as grant EU authorities additional powers to monitor those who hold over 1 million euros in high-yield assets.
The amendment is consistent with previous crypto-tax policies proposed by the Organization for Economic Co-operation and Development (OECD), which seeks to regulate crypto-tax reporting based on the suggestions of EU member countries.
The OECD released a proposal on new crypto tax reporting rules on March 22, 2022, called the Crypto-Asset Reporting Framework (CARF), in an attempt to standardize the international exchange of crypto-related transaction data between tax authorities and crypto-asset service providers.
The OECD approved the CARF in August 2022 and presented the amended standard to central bank of governors of the G20.