Context of the proposal

According to the European Commission, the emergence of alternative means of payment and investment, such as crypto-assets and e-money, threatens to undermine the progress made on tax transparency in recent years and poses substantial risks for tax evasion. The European Commission states that regulation and reporting obligations can help to prevent tax evasion, money laundering, and other illegal activities that can undermine the integrity of the markets.

The proposal, constituting the seventh amendment to the DAC (commonly referred to as DAC8), is consistent with the OECD initiative on the Crypto-Asset Reporting Framework (CARF) and the amendments to the OECD Common Reporting Standard (CRS). For more information on the CARF we refer to our earlier newsletter: Public consultation OECD regarding Crypto-Asset Reporting Framework | Loyens & Loeff (

The proposal describes that the characteristics of crypto-assets make the traceability and detection of taxable events by tax administrations very difficult. The problem intensifies in particular when taxpayers transfer or exchange crypto-assets using foreign service providers or operators, or without the intervention of any intermediary.

To assist tax administrations in levying taxes on certain crypto-asset transactions, or audit tax returns where crypto-asset investments are involved, the new transparency rules are intended to require crypto service providers to report certain information on crypto-asset transactions to local tax administrations. Subsequently such information will be automatically exchanged with other EU member states.

It is conceivable that certain transactions remain outside the crypto service providers’ field of vision, since crypto-assets can inherently be held and exchanged without the intervention of traditional financial intermediaries and without a central administrator having full visibility of the transactions made. It is therefore important for any crypto service provider to have a complete as possible view on a full range of reportable crypto-asset transactions, in order to be fully compliant with the proposal, should it be enacted in its current form.

The amendments to CRS relate to the introduction of reporting on e-money products and central bank digital currencies as well as crypto-assets. Furthermore the due diligence procedures will be amended, as well as the information to be reported in respect of for instance the controlling persons.

DAC8 also proposes to introduce a minimum level of penalties, with for instance penalties of up to EUR 500,000 for infringements of the country-by-country reporting requirements.

The draft DAC amendment also expands the scope of mandatory automatic exchange of information on tax rulings and advanced pricing agreements to high-net-worth individuals who hold a minimum of EUR 1,000,000 in financial or investable wealth or assets under management, excluding that individual’s main private residence.

Follow-up and next steps

Despite the fact that the envisaged effective date of 1 January 2026 still seems far away, it is important to carefully consider how internal processes should be set up so that the reporting obligations can be met, as this process may be burdensome.

With our extensive experience in the field of DAC, tax reporting obligations and crypto-asset transactions in general, we are perfectly placed to help understanding your reporting obligations, discuss specific compliance issues and assist in developing a plan to meet all necessary compliance standards.

For more information about DAC8, please contact a member of our dedicated Tax Transparency Team or your trusted Loyens & Loeff adviser.

Although this publication has been complied with great care, Loyens & Loeff N.V. and all other entities, partnerships, persons and practices trading under the name ‘Loyens & Loeff’, cannot accept any liability for the consequences of making use of this issue without their cooperation. The information provided is intended as general information and cannot be regarded as advice.