EU’s crypto tax reporting starts in January with threat of asset seizure

The European Union’s newest tax transparency law for digital assets takes effect Jan. 1, marking a shift in how crypto activity faces scrutiny across the bloc.

Known as DAC8, the directive extends the EU’s long-running framework for administrative cooperation on taxation to crypto assets and related service providers. The rules require crypto-asset service providers, including exchanges and brokers, to collect and report detailed information on users and transactions to national tax authorities. Those authorities then share the data across EU member states.

The move matters because it closes a gap that left parts of the crypto economy outside standard tax reporting. Under DAC8, authorities gain a clearer view of crypto holdings, trades and transfers that mirror the visibility already applied to bank accounts and securities.

DAC8 operates alongside, but separately from, the EU’s Markets in Crypto-Assets (MiCA) regulation. MiCA, passed in April 2023, governs how crypto firms obtain licenses, protect customers and operate across the single market. DAC8 targets tax compliance, giving authorities the data needed to assess and enforce tax obligations. MiCA regulates market conduct, while DAC8 polices the tax trail.

The directive applies from Jan. 1, but crypto firms have a transition period. Providers have until July 1 to bring reporting systems, customer due diligence processes and internal controls into full compliance. After that deadline, failures to report can trigger penalties under national law.

For crypto users, enforcement carries sharper consequences. If tax authorities detect avoidance or evasion, DAC8 allows local agencies to act with support from counterparts in other EU countries. That cooperation includes the power to embargo or seize crypto assets linked to unpaid taxes, even when assets or platforms sit outside a user’s home jurisdiction.