- With the rise of cryptocurrency, tax authorities are facing challenges in identifying taxable transactions.
- The European Commission has introduced the DAC8 directive to provide tax authorities in the EU with the necessary information to tax cryptocurrency transactions.
- Currently, tax authorities have limited visibility into taxable transactions involving cryptocurrencies, as trading occurs on unregulated platforms and can involve multiple cross-border transactions in a single day.
- To address this, platforms offering crypto asset services will be required to share user data, including customer information and transaction details, starting from January 1, 2027.
- The reporting obligations depend on the Member State where the platform has obtained the MiCA license.
- Non-compliance with DAC8 may result in significant fines, although the specific criteria for determining the amount of the fine are yet to be clarified.
Source Taxence
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