The EU’s DAC8 Directive (Directive on Administrative Cooperation, 8th Revision), as the latest regulation introduced by the EU to enhance transparency in digital asset taxation, will officially come into effect on January 1, 2026.
(Background: The EU Council finalizes legislative stance on “Digital Euro”: CBDC to coexist with cash, expected to launch in the second half of 2026)
(Additional context: Is EU crypto regulation moving towards centralization? A new proposal aims to grant ESMA full authority to regulate the crypto industry)

Table of Contents

• Core Regulatory Content
• Why Is This an Important Shift?
• Impact on Users and Service Providers

The EU’s DAC8 Directive (Directive on Administrative Cooperation, 8th Revision), as the latest regulation introduced by the EU to enhance transparency in digital asset taxation, will officially come into effect on January 1, 2026. This directive marks a significant change in how the EU regulates crypto activities: it incorporates crypto asset transactions into the automatic information exchange system of tax authorities, aiming to improve tax transparency and prevent tax evasion.

Core Regulatory Content

The core of DAC8 is the implementation of the OECD’s Crypto-Asset Reporting Framework (CARF). This framework requires all crypto-asset service providers (Reporting Crypto-Asset Service Providers, RCASPs), including exchanges, wallet providers, brokers, and others, to report relevant information to tax authorities.

These providers, regardless of whether they are inside or outside the EU, must comply as long as they serve EU resident users. The reporting includes identity information of EU resident users, tax residence, account balances, and transaction details such as buying, selling, transferring, and exchanging, along with transaction amounts.

Starting from January 1, 2026, service providers will begin collecting transaction data for that year, and each member state’s tax authorities will automatically exchange this information. The first reports are expected to be submitted in 2027, typically within 9 months after the end of the fiscal year.

Additionally, DAC8 has extraterritorial applicability, meaning that even if service providers are outside the EU, as long as they involve EU users, they must conduct customer due diligence (strengthening KYC), collect self-certification documents, and face penalties for non-compliance. The European Commission released implementation guidelines in November 2025, further standardizing reporting formats and digital standards.

Why Is This an Important Shift?

The decentralized and cross-border nature of crypto assets has historically made it difficult for tax authorities to effectively track transactions, leading to potential tax revenue loss and evasion risks. DAC8 will place crypto activities on the same transparency level as traditional finance (such as bank accounts), enabling tax authorities to more accurately monitor capital gains, income, and other taxable events.

This shift complements the EU’s crypto market regulation (MiCA): while MiCA focuses on market oversight and consumer protection, DAC8 emphasizes tax transparency. Overall, DAC8 aims to combat tax base erosion, improve compliance, and is expected to generate additional tax revenue for the EU. Many crypto platforms are already upgrading their systems in advance to prepare for the upcoming reporting obligations.

Impact on Users and Service Providers

For individual users, EU residents holding or trading crypto assets will find their activities more easily monitored by tax authorities. This may increase users’ tax reporting responsibilities, depending on the domestic laws of each member state.

For service providers, the impact is more direct. Platforms must invest in system upgrades, strengthen user identity verification, and regularly report data. Non-compliance could result in fines according to each member state’s regulations. Additionally, non-EU platforms with EU users must also register and comply within the EU; otherwise, they risk service restrictions or asset freezes.

Overall, this will increase compliance costs for the industry but also provide a clearer regulatory environment for serious operators.