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What is DAC8?
DAC8 is the eighth amendment to the EU Directive on Administrative Cooperation in Direct Taxation (DACs) and is set to introduce mandatory reporting of crypto-asset transactions from 1st January 2026. Its primary goal is to ensure that tax authorities can monitor and understand crypto transactions in the same way they currently track bank accounts and traditional investments.
Under DAC8, crypto businesses will be required to share information about their users and transactions with tax authorities. This will enable governments to ensure that individuals and businesses are paying the correct amount of tax on their crypto activity.
The directive was introduced in response to the rapid growth of crypto investments, which until now have been difficult for tax authorities to monitor. DAC8 aims to increase transparency, reduce tax evasion, align crypto with the reporting standards applied to banks and financial institutions, and create consistent rules across all EU member states.
Business activity in scope
DAC8 primarily applies to crypto-asset service providers, including crypto exchanges, platforms that enable buying, selling, or exchanging crypto, brokers and intermediaries, certain wallet providers, and other platforms offering crypto services to EU customers.
Importantly, a business does not need to be based in the EU to fall under DAC8. If it serves EU customers, the directive can still apply.
For example, consider a company that operates an online crypto exchange where users can buy and sell crypto using euro, exchange Bitcoin for Ethereum, or withdraw crypto to external wallets. If the platform has users based in Malta, Germany, and France, it falls within DAC8's scope. This is because it facilitates crypto transactions, serves EU customers, and acts as an intermediary between buyers and sellers. Such a business is therefore required to collect and report user and transaction data in compliance with the directive.
Nature of impact (compliance obligations)
Businesses that fall within the scope of DAC8 are required to:
- Identify their users – collect personal information such as name, address, and country of tax residence, and obtain tax identification numbers.
- Track transactions – record all crypto purchases, sales, exchanges, and transfers, including transaction values and dates.
- Report information – submit annual reports to tax authorities, including user details and transaction summaries.
- Maintain records – keep accurate data and documentation and be prepared to respond to queries from tax authorities.
In practice, crypto platforms will need systems similar to those used by banks for reporting. The information collected will be shared between EU tax authorities, enabling them to match crypto activity with tax returns. Individuals and businesses may be questioned if discrepancies are identified.
Non-compliance could result in financial penalties, increased audits, or further investigations. EU member states were required to implement DAC8 into national law by the end of 2025. While the first reporting is expected as from 2026, Malta has not yet introduced the Directive into local legislation.
How we can help
BDO Malta can help crypto asset providers comply with DAC8 mainly by:
- Reviewing the business model and activities to determine whether you qualify as a crypto-asset service provider;
- Assess if you have EU users or EU tax exposure;
- Assist with respect to the data that must be collected;
- Assisting with the reporting process; and
- Explain the consequences of non-compliance.
Timeframes
The key deadlines under DAC8 are as follows:
- From 1st January 2026, crypto asset providers must begin to collect the required information;
- By the end of 2026, all reportable transactions for the year should be readily available; and
- By mid-to-late 2027, the first official reporting and exchange of this data is expected to take place.
The exact deadlines will depend on each EU country's national legislation. At present, we do not have information on the local deadlines, as the official legislation transposing DAC8 into our national law has not yet been issued.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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