DAC8 to harmonise EU tax reporting by e-money and cryptocurrency intermediaries – 7 December 2022 proposals
The European Commission is to publish a new Directive on Administrative Cooperation covering tax reporting on cryptocurrencies (‘DAC8’). The latest publication date is 7th December 2022.
It will aim to harmonise reporting on digital currencies, including annual reports from crypto exchanges / marketplaces. This will improve transparency on tax liabilities, helping identify income and taxable gains. It will also provide efficiencies for taxpayers and authorities via consistent information requirements across the 27 member states.
Following a public consultation in 2021, the draft DAC8 will be published before year end. This comes as the EU is drawing up a single licensing regime in the form of the Markets in Crypto-Assets (MICA) regulation.
Potential DAC8 reporting requirements
The likely requirements may include:
- Annual reporting by crypto marketplaces
- Will impact EU-resident intermediaries with scope for non-EU players with significant levels of EU trade
- Trader background information – names, address, tax identification information
- Transactional details of traders’ acquisitions, disposals and income
The Organisation for Economic Co-operation and Development (OECD) is also in the process of creating a crypto-asset reporting framework (CARF).
VAT on cryptocurrencies
|Crypto-assets||Payment, security or utility tokens||Treated as currency|
|Creation of tokens||Mining or forging||Out of scope of VAT|
|Supplies free of charge||Airdrop||Out of scope of VAT|
|Supplies for consideration||Taxable; but exempt|
|Storage and transfer||Hot or cold digital wallets||Taxable; but exempt|
|Exchange for crypto-assets or cryptocurrencies||Taxable; but exempt|
|Cryptocurrencies as consideration for supply||Taxable; VAT due|
|Token modification||Modifications, forks or splitting of tokens||Out of scope of VAT|