Bernardo Mesquita signs the opinion article "Self-hosted wallets and decentralised crypto exchanges: DAC 8's Achilles' heel", recently published in ITR (International Tax Review).
The tax associate analyses the EU's latest regulatory efforts to ensure that tax compliance for crypto assets is fully realised.
«On May 16, 2023, the Economic and Financial Affairs Council of the EU reached an agreement on adopting the proposal to amend the EU Directive on Administrative Cooperation (DAC), intending to extend the exchange of information regime to cover crypto assets and e‑money (DAC8).
In practice, reporting crypto-asset service providers (RCASPs) (meaning any person whose business is the provision of one or more crypto‑asset services to third parties on a professional basis, and crypto‑asset operators that do not fall under the scope of markets in crypto assets [MiCA] regulation), will be required to carry out due diligence procedures to identify and report transactions of clients residing in the EU to the competent tax authorities. Subsequently this information will be exchanged by the recipient’s member state with the tax authorities of the member state where the reportable client is a tax resident. The information to be exchanged includes identification details of the reportable client, identification details of the RCASP and details of the reportable transaction.
The rules contained in DAC8 are largely consistent and must be considered alongside the OECD’s Crypto-Asset Reporting Framework (CARF), approved by the G20 in November 2022, which aims to provide a global tax transparency framework for the automatic exchange of tax information on crypto-asset transactions. Since the OECD has not yet developed its implementation framework, by agreeing on the DAC8, the EU has moved ahead of the OECD in the implementation of CARF. […]».
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