The European Council has approved updated rules that expand tax reporting requirements to include transfers of crypto assets. This is the eighth edition of the Directive on Administrative Cooperation (DAC), a set of procedures for automatic information sharing between European governments for tax purposes.
DAC8 was proposed in December and approved on May 16 after passing of markets in crypto-assets (MiCA), as it depends on the definitions established in that law. The new DAC follows the Crypto-Asset Reporting Framework (CARF) and amendments Published Reporting Standards Under the G20 mandate by the Organization for Economic Co-operation and Development (OECD) in October.
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DAC8 requires Crypto Asset Service Providers (CASPs) to collect information on crypto asset transfers of any amount to ensure traceability and identify suspicious transactions. It strengthens EU Anti-Money Laundering and Countering Terrorism Financing (AML/CFT) regulations and proposes the creation of a new European AML body. proposed regulation Is necessary That CASP:
“Ensure that transfers of crypto-assets are accompanied by the name of the beneficiary, the address of the distributed ledger of the beneficiary, in cases where the transfer of crypto-assets is registered on the network using DLT or similar technology, [and] Account number of the beneficiary, in cases where such account exists.”
The proposed regulation further states: “The information must be submitted in a secure manner and in advance of or simultaneously or concurrently with the transfer of the crypto-asset.”
In addition to new requirements for CASPs, DAC8 includes new reporting rules relating to high-income individuals and tougher requirements for transmitting tax identification numbers.
We welcome the political agreement reached today by EU Finance Ministers on new tax transparency rules on the crypto-asset sector.
The directive will improve the ability of EU countries to detect and combat tax fraud, tax evasion and tax avoidance.
more info ↓
– European Commission (@EU_Commission) May 16, 2023
Swedish Finance Minister Elizabeth Svantesson Said in a statement:
“Today’s decision is bad news for those who have misused crypto-assets for their illegal activities to circumvent EU sanctions or finance terrorism and war. It is now possible to do so without risk in Europe Will not done.”
Changes to the DAC are made not through legislation, but through a consultative process between member states of the Council of Europe.
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