Germany is intensifying its crackdown on cryptocurrency tax evasion, implementing the European Union's DAC8 directive starting January 1, 2026. This regulation mandates that all crypto-asset service providers (CASPs) operating in Germany—including major platforms like Bitpanda, Bison, Binance, Coinbase, and Kraken—must automatically collect and submit detailed client and transaction information to federal and regional tax authorities. The directive facilitates the cross-border exchange of this data among all 27 EU member states, aiming to combat tax fraud and increase transparency.
German tax offices are enhancing their investigative capabilities, employing specialized tools from firms like Chainalysis to link blockchain transactions to individual taxpayers. This significantly raises the risk of detection for evaders. For German investors, profits under €1,000 annually are tax-free, as are gains from assets held for over one year. Staking, lending, or mining income has a lower tax-free threshold of €256. Beyond these limits, profits are subject to personal income tax at rates from 0% to 45%, with an additional solidarity surcharge possible. Tax returns for 2025 are due by the end of July 2026.
Simultaneously, U.S. crypto investors face a confusing tax season as the Internal Revenue Service (IRS) rolls out new Form 1099-DA reporting requirements for the 2025 tax year. Brokers like Coinbase and Kraken are now required to report gross proceeds from customer sales to both the taxpayer and the IRS. However, a critical gap exists: cost basis information (the original purchase price) is not being reported this year, placing the burden on taxpayers to calculate their own gains or losses accurately.
This presents a major challenge, especially for active traders using multiple exchanges and wallets or engaging in DeFi, staking, or transfers. Experts warn that discrepancies between the 1099-DA forms and tax returns could trigger automated IRS compliance letters. The system is expected to become more comprehensive in the 2026 tax year, when brokers must report both proceeds and cost basis for "covered" assets acquired on or after January 1, 2026.
