The European Union's Directive on Administrative Cooperation (DAC8), a landmark tax transparency framework for crypto assets, officially took effect on January 1, 2026. This represents the eighth update to the EU's long-running tax cooperation directive and significantly expands its scope to explicitly cover cryptocurrency transactions and service providers.
The rules, first agreed upon by EU politicians in May 2023, required member states to transpose them into national law by December 31, 2025. DAC8 mandates that all crypto-asset service providers (CASPs), including exchanges and brokers operating within the 27-member bloc, must collect and report detailed user information and transaction data to their national tax authorities. This data is then automatically shared between EU countries.
Key requirements include the legal obligation for exchanges to identify users by name, address, and tax identification number. Alongside this identifying information, firms must report users' full transaction histories annually. The reported data encompasses a wide range of activities: purchases of crypto with fiat currency, sales for fiat, exchanges between different digital assets, crypto payments for goods and services, and even transfers from exchanges to private, unhosted wallets like Ledger or MetaMask.
Antonia Eilander, a corporate and tax lawyer with the Netherlands-based crypto law firm O2K, stated that DAC8 "significantly increases tax transparency." She emphasized, "For users, this means that crypto activity is far more likely to be matched against tax returns, even where no fiat cash-out occurs." Yulia Privalova, a lawyer at crypto exchange Asterium, added that it signals the end of anonymous transactions on regulated platforms, noting "crypto activity on centralized exchanges is now treated in a similar way to traditional banking activity."
Data collection for the 2026 tax year has already begun. Crypto companies have a grace period until July 1, 2026, to ensure full compliance with the reporting requirements. Non-compliance may result in penalties. The directive operates in parallel with the EU's Markets in Crypto-Assets (MiCA) regulation.
While the EU frames DAC8 as a transparency measure, critics view it as an assault on financial privacy. Crypto educator Heidi Chakos commented on X, "Tax authorities now have an automated dashboard tracking your digital assets... Privacy has never been more important than right now."
Importantly, the lawyers clarified that DAC8 does not create new taxes or direct reporting obligations for individual users. However, by providing tax authorities with reliable, third-party data, it dramatically increases the detectability of non-reporting and under-reporting. The directive also introduces complexity regarding tax residence, which is based on domestic tax law rather than nationality, raising potential risks of double taxation if residence is incorrectly determined.
