As published on: coindesk.com, Wednesday 18 October, 2023.
The rules, set to be published in the EU's official journal, force crypto firms to report on customers' holdings to be shared between tax authorities.
New European Union rules that let tax authorities share data on individuals' crypto holdings were formally adopted by the bloc's finance ministers on Tuesday. The document will now be published in the EU's Official Journal and enter into force 20 days later.
The rules were proposed last year in a bid to block assets from being stashed overseas using crypto and had unanimous support from EU member states despite discussions mostly taking place largely behind closed doors.
In May, a copy of the draft bill obtained by CoinDesk under freedom of information laws showed the rules extend an existing law to cover a wide range of digital assets confirmed on Tuesday to include stablecoins, non-fungible tokens (NFTs), decentralized finance (DeFi) tokens, as well as proceeds from crypto staking.
The law, known as the Eighth Directive on Administrative Cooperation (DAC8), forces crypto companies to report information on customers' holdings that will automatically be shared between tax authorities.
The European Commission, responsible for proposing new EU legislation, said on Tuesday that DAC8's crypto provisions complement the recently finalized landmark Markets in Crypto Assets Regulation (MiCA) and anti-money laundering rules under the Transfer of Funds Regulation (TFR).
"The directive will improve Member States' ability to detect and combat tax fraud, avoidance and evasion, by requiring all EU-based crypto-asset service providers, regardless of their size, that they report transactions from customers residing in the EU," the Commission said in a statement on Tuesday.
It added that the scope of the rules was expanded from previous versions to also apply to financial institutions with respect to electronic money and central bank digital currencies (CBDC).