- The EU has adopted a new tax reporting rule.
- Crypto asset service providers to meet new obligations.
- The rule will go into effect once captured in the EU journal.
On October 17, the Council of the European Union announced the adoption of a directive amending the region’s rules on administrative cooperation in taxation, especially on revenues from transactions in crypto assets.
The development stems from a December 2021 report by the council urging the European Commission to table a legislative proposal on further amendment of the directive 2011/16/EU on administrative cooperation in the field of taxation (DAC) and include provisions for the exchange of information on crypto assets and tax rulings for wealthy individuals.
Mandatory Reporting Requirements for Crypto Firms
Per the announcement, the council has adopted the eighth iteration of the Directive on Administrative Cooperation (DAC8), a cryptocurrency tax reporting rule whose scope has been extrapolated to include stablecoins, non-fungible tokens (NFTs), e-money tokens, and digital assets issued in a “decentralized manner.”
Noting that the legislation aimed to enlarge the scope for registration and reporting obligations of tax administration, the council averred that there would be a “mandatory automatic exchange between tax authorities of information,” which crypto asset service providers would have to share once the directive is published in the EU journal.
“So far, the decentralized nature of crypto-assets has made it difficult for member states’ tax administrations to ensure tax compliance. The inherent cross-border nature of crypto-assets requires strong international administrative cooperation to ensure effective tax collection,” the council said.
On the same day of the announcement, the council also released an updated list of non-cooperative jurisdictions for tax purposes in the EU.
Non-Cooperative Jurisdictions for Tax Purposes
Even as the Council of the EU continues taking bold steps to broaden the region’s tax base and improve governance, some jurisdictions still hesitate to adopt the institution’s recommendations.
According to an October 17 press release, the council has added Antigua, Barbuda, Belize, and Seychelles to the list of non-cooperative jurisdictions for tax purposes, while the British Virgin Islands, Costa Rica, and the Marshall Islands have been struck off.
Read how the FCA resisted political push to vouch for crypto in the UK:
FCA Resisted Political Push to Open UK Crypto Market Access
Read why PayPal suspended crypto sales in the UK:
PayPal Suspends Crypto Sales in the U.K. Starting October