EU adopts Directive introducing tax transparency rules for crypto assets (DAC8)

Local contact

EY Global

24 Oct 2023
Subject Tax Alert
Jurisdictions European Union
  • The European Union (EU) Member States have formally adopted amendments to Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC8 or the Directive).
  • The adoption follows political agreement by the Council on 16 May 2023. Proposed amendments from the European Parliament were not introduced in the final text of the Directive.
  • Most notably, DAC8 introduces tax information reporting and exchange for crypto-assets, but it also introduces other rules to expand cooperation between Member States' authorities.

Executive summary

On 17 October 2023, the Council of the European Union (the Council) unanimously adopted the revised DAC8 (pdf). This follows a political agreement reached on 16 May 2023 and a nonbinding opinion published by the European Parliament on 13 September 2023.1

DAC8 should be read in close conjunction with the Markets in Crypto-Asset Regulation (MiCAR) as it contains many cross references to definitions included in the regulation.

In part, DAC8:

i. Extends the scope of automatic exchange of information to include information from transactions (transfer or exchange) in crypto-assets, noncustodial dividends (and similar revenues) and advance cross-border tax rulings for high-net-worth individuals

ii. Expands the information to be reported under DAC2 (Common Reporting Standard) (CRS) and includes other adjustments made to the CRS by the Organisation for Economic Co-operation and Development (OECD)

iii. Incorporates the exemption for lawyers bound by the legal professional privilege from notifying other intermediaries of their DAC6 (mandatory disclosure rules) (MDR) reporting obligations to comply with the Court of Justice of the European Union (CJEU) ruling on Case C-694/20

iv. Introduces for DAC7 (reporting for digital platforms) the possibility of reporting an identifier issued by a government verification service as an alternative to the Seller's taxpayer identification number (TIN)

v. Broadens the use of received information by automatic exchange to value added tax (VAT), indirect taxes, custom duties, and non-tax purposes when it concerns anti-money laundering and countering the financing of terrorism

vi. Clarifies that information exchanged under the DAC may be used for the detection of violation or circumvention of restrictive measures (EU sanctions)

vii. Introduces the obligation for Member States to put an effective mechanism in place to ensure the use of information received via automatic exchange

viii. Introduces the development of a European verification tool on TINs accessible by governments

ix. Introduces the obligation for Member States to store information received via automatic exchanges for at least 5 years after the day of receipt, but no longer than necessary

x. Requires Member States to endeavor to ensure that a reporting entity is permitted to electronically confirm the validity of the TIN information of any taxpayer subject to the automatic DAC exchange-of-information regimes

xi. Expands the obligation of Member States to annually monitor and report to the European Commission about the effectiveness of administrative cooperation, to also monitor and report about the effectiveness of combatting tax evasion and avoidance

xii. Introduces TIN reporting to governments for DAC3 (rulings), DAC4 (country-by-country reporting) and DAC6 (MDR) for taxable periods starting from 1 January 2028; TIN reporting for DAC1 (exchange of information on noncustodial dividends and similar revenues) regarding income from employment, director's fees and pensions is introduced for taxable periods starting from 1 January 2030

EU Member States have until 31 December 2025 to transpose the main rules into national law, and the new provisions will generally apply as of 1 January 2026 (exceptions apply as indicated above).

Detailed discussion


The initial purpose of the Directive on Administration Cooperation (DAC) was to facilitate administrative cooperation between tax authorities and the exchange of information on employment income, pension income, and certain other payments. The DAC has undergone multiple amendments over time to allow for the automatic exchange of information across various fields of taxation.

On 10 March 2021, the European Commission (the Commission) launched a public consultation that concluded on 2 June 2021. The Commission solicited feedback on new rules for reporting and exchange of information for tax purposes regarding e-money and crypto-assets, as well as revised rules for penalties and compliance measures for the various reporting obligations under the DAC.

On 8 December 2022, the Commission released a legislative proposal that aimed to enhance the existing provisions of the DAC and extend the scope of automatic exchange to certain specific information reported by reporting crypto-asset service providers, known as DAC8.2 Two months prior, the OECD launched the Crypto Assets Reporting Framework (CARF) and introduced enhancements to the CRS.3

On 16 May 2023, at the ECOFIN meeting, EU Finance Ministers reached a political agreement (general approach) on a compromise text (pdf) for DAC8. The compromise text was the result of negotiations among the Member States and differed from the Commission's initial proposal. The differences introduced included changes to the minimum penalty regime, the exchange of cross-border rulings, elements of the timeline, the dynamic interpretation of the OECD Commentaries, and an amendment regarding the notification requirements for intermediaries under DAC6.4

On 13 September 2023, the European Parliament completed the parliamentary consultation process for DAC8 by adopting its nonbinding opinion (pdf), based on the text of the Commission's initial proposal. The proposed amendments included in the Parliament's nonbinding opinion (114 in total) were not introduced in the final text of the Directive. As a consequence, crypto-assets in scope5 remain the same. This means, for example, that staking and lending activities remain in-scope of DAC8. Also, certain non-fungible tokens (NFTs) that are held for investment or payment purposes are covered. No coordinated minimum penalty regime will be introduced as proposed by the Commission in the initial version, deleted in the ECOFIN version and reproposed by the European Parliament.

Revised DAC8

During the ECOFIN meeting of 17 October 2023, the Council unanimously adopted the revised DAC8.

The text was adopted by the Council without discussion and incorporates the substantive changes as introduced in the compromise text politically agreed upon by the Council on 16 May 2023. The adopted version includes mainly editorial changes following a legal-linguistic review by the EU institutions, as compared to the previous compromise text.

The Directive features, among others, the following key elements.

Expanding scope for automatic exchange of information to crypto-assets and e-money

Reportable Crypto-Asset Service Providers (RCASPs) should annually collect, report and exchange information on crypto-assets. Information to be reported to the competent authority (i.e., the tax authorities of the Member State of residence, authorization or registration) includes information on the RCASP itself, the reportable users and transactional information on reportable crypto-assets. The tax authorities will then share the locally reported information with tax authorities of the users' residence via the EU Common Communication Network using an XML schema, which the Commission has yet to develop.

E-money products and Central Bank Digital Currencies (CBDC) are also brought into scope of DAC2/CRS information reporting rules with the aim of ensuring a level playing field (exceptions apply for products considered to be low-risk). In principle, the reporting on e-money products and CBDCs is performed by the customer's bank as depository institution and potentially central banks if they would maintain CBDCs for account holders that are not Financial Institutions, Governmental Entities, International Organizations or Central Banks.6

Exchanging information on noncustodial dividends and similar revenues (DAC1)

The Directive extends the scope of the current rules on exchange of tax-relevant information by including provisions on automatic exchange of information on noncustodial dividends7 and similar revenues, as the current provisions of DAC do not cover this type of income.

Expanding information required to be reported under CRS (DAC2)

The reporting requirements under DAC2/CRS have been expanded to include the reporting of the role(s) by virtue of which the Reportable Person is a Controlling Person or Equity Interest holder. In light of this, Financial Institutions will need to evaluate the extent to which they possess such information or to actively request it from their clients. Financial Institutions will also need to report whether a valid self-certification has been provided for each Reportable Person, (i) whether the account is a joint account including the number of joint Account Holders, (ii) the type of account and (iii) whether the account is a Pre-existing account or a New Account.

Exchanging advance cross-border rulings concerning high-net-worth individuals (DAC3)

The competent authorities of the Member States should automatically exchange information on the following categories of advance cross-border rulings issued, amended or renewed after 1 January 2026:

  • Advance cross-border rulings concerning and involving the tax affairs of one or more natural persons where the amount of the transaction or series of transactions exceeds €1.5 million and such amount is referred to in the ruling
  • Advance cross-border rulings determining the tax residence of a natural person in a Member State (exceptions apply considering proportionality and to avoid increasing the administrative burden)
Amending DAC6

The Directive introduces an exemption for lawyers bound by the legal professional privilege from notifying other intermediaries of their reporting obligations to comply with the CJEU ruling on Case C-694/20 (pdf).

Expanding use of information exchanged

DAC8 indicates that information communicated between Member States pursuant to the DACs can be used for the assessment, administration, and enforcement of the national law of Member States. DAC8 also broadens that application of the DAC for VAT, other indirect taxes, customs duties, anti-money-laundering measures and provisions to help counter the financing of terrorism. Note that DAC8 opens the door for making available to non-tax authorities' information that was exchanged for tax purposes under the DAC.

In addition, DAC8 introduces the possibility of using the exchanged information without permission of the Member State that sent the information for any purpose that is covered by an act based on article 215 of the Treaty on the Functioning of the European Union (TFEU) and share it for such purpose with the competent authority in charge of restrictive measures in the Member State to prevent breaches of sanctions.

Enhancing reporting and communication of TINs

The Commission will provide Member States with a tool to allow automated, electronic verification of the TIN provided by a reporting entity or taxpayer for the purpose of automatic exchange of information. Member States will concurrently endeavor to ensure that a reporting entity is allowed to obtain electronic confirmation of the validity of a TIN in the context of DAC1, DAC2, DAC3, DAC4, DAC6, DAC7 and DAC8.

Next steps

DAC8 will become effective on 13 November 2023, 20 days after its publication in the Official Journal of the EU.

EU Member States are required to transpose the main rules into national law by 31 December 2025, and the new provisions will apply as of 1 January 2026. However, two exceptions apply:

i. The provisions related to identification services should be transposed into national law by 1 January 2024 and apply as of 1 January 2025.

ii. The provisions related to TIN validation should be transposed into national law by 31 December 2027 and apply as of 1 January 2028.


The provisions of the Directive seek to address the challenges that the EU sees attached to the increasing use of crypto-assets for investment purposes. This Directive aims at increasing the tax transparency on crypto-assets and their reporting. Further, DAC8 introduces not only reporting obligations for crypto-assets but also amendments to the overall DAC framework.

Affected organizations should initiate a timely assessment of required changes in customer onboarding and communication processes, as well as compliance and operations processes, and begin implementation efforts as soon as possible.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Belastingadviseurs LLP, Rotterdam
  • Marlies de Ruiter
  • Maikel Evers
  • Mahi Anastasiou
Ernst & Young Belastingadviseurs LLP, Amsterdam
  • Dennis Post
  • Lu-Shen Qua
  • Toine Gorissen
  • Konstantina Tsilimigka
Ernst & Young LLP, Oslo
  • Magnus Jones
  • Ingebjørg Brekka
Ernst & Young LLP (United Kingdom), London
  • Abi Jeffreys
Ernst & Young LLP, Luxembourg
  • Patrice Fritsch
  • Dan Zandona
  • Eva Constantin

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.