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<![CDATA[<figure class="image"><img src="https://cimg.co/news/126575/334241/4263128691-media-library-.jpeg" srcset="https://cimg.co/news/126575/334241/responsive-images/4263128691-media-library-___media_library_original_1200_800.jpeg 1200w, https://cimg.co/news/126575/334241/responsive-images/4263128691-media-library-___media_library_original_900_600.jpeg 900w, https://cimg.co/news/126575/334241/responsive-images/4263128691-media-library-___media_library_original_720_480.jpeg 720w, https://cimg.co/news/126575/334241/responsive-images/4263128691-media-library-___media_library_original_600_400.jpeg 600w, https://cimg.co/news/126575/334241/responsive-images/4263128691-media-library-___media_library_original_300_200.jpeg 300w" width="1200" class="content-img" alt=""><figcaption>Source: AdobeStock / Grecaud Paul</figcaption></figure>European Union (EU) finance ministers approve new regulations requiring cryptocurrency firms to share data on customer cryptocurrency holdings with tax authorities.On October 17, the EU <a href="https://www.consilium.europa.eu/en/press/press-releases/2023/10/17/council-adopts-directive-to-boost-cooperation-between-national-taxation-authorities-dac8/">adopted</a> the Eighth Directive on Administrative Cooperation (DAC8), which is set to go into force in 2024. The directive will be published in the Official Journal, the European Union's gazette of legal acts, and enter into effect on the 20th day following publication.The directive, DAC8, issued a new guideline for crypto-asset service providers (CASPs) to report certain information about their clients' transactions to the tax authorities of the EU member states in which the clients reside.Proposed last year and recently approved, the directive aims to enhance tax transparency and combat tax evasion, particularly in cases where high-net-worth individuals use crypto assets to mitigate <a href="https://cryptonews.com/news/europes-data-agencies-express-concerns-over-privacy-standards-with-digital-euro.htm">tax liability</a>.The tax rules, officially named the Eighth Directive on Administrative Cooperation (DAC8), were initially submitted to the European Commission on December 8, 2022.In May 2023, the DAC8 was approved after the Markets in Crypto-Assets (MiCA) legislation was enacted. The "eight" in the name signifies that it's the eighth version of such directives, with each previous one addressing different facets of financial oversight.The DAC8 aims to complement existing regulations regarding crypto markets and anti-money laundering rules, thereby aiming to provide a comprehensive framework for regulating the crypto industry within the EU. It will apply to all CASPs based in the EU, regardless of their size, and will also encompass financial institutions dealing with electronic money and central bank digital currencies.DAC8's objective is to empower tax authorities to oversee and assess every cryptocurrency transaction conducted by individuals or entities in any EU member state. The draft bill revealed that the directives expanded an existing law to encompass a broad spectrum of digital assets.&nbsp;The directive's coverage extends to stablecoins, non-fungible tokens (NFTs), e-money tokens, and crypto-assets issued in a "decentralized manner", tokens related to decentralized finance (DeFi), and earnings from crypto staking.<h2 id="european-commission-underlines-dac8-crypto-provisions-in-synergy-with-mica-and-aml-rules">European Commission Underlines DAC8 Crypto Provisions in Synergy with MiCA and AML Rules</h2>The European Commission emphasized that DAC8's crypto provisions are designed to work in conjunction with the recently finalized <a href="https://cryptonews.com/news/eus-mica-law-nears-final-vote-raising-high-hopes-for-crypto-regulation.htm">MiCA</a> and anti-money laundering rules established under the Transfer of Funds Regulation (TFR).Under MiCA, cryptocurrency companies and exchanges are obliged to obtain licenses for operating within the European Union. Additionally, the regulation mandates that issuers of stablecoins maintain appropriate reserves to ensure their stability and security.In September, a <a href="https://cryptonews.com/news/european-parliament-supports-dac8-crypto-tax-rule-by-an-overwhelming-margin.htm">plenary session</a> was held in Strasbourg, France, where lawmakers in the European Parliament voted overwhelmingly in favour of the eighth version of the Directive on Administrative Cooperation (DAC8).&nbsp;The vote saw strong support, with 535 member votes in favour and only 57 against, along with 60 abstentions. The plenary session vote marked the final hurdle for the passage of DAC8.In the future, EU member states will have until December 31, 2025, to implement these rules before they officially come into effect on January 1, 2026.
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EU Adopts DAC8 – New Cryptocurrency Tax Reporting Rule To Take Effect Soon

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