Fatca & CRS Alert 2022-05

EU proposal to amend the Directive on Administrative Cooperation in the field of taxation (DAC8)

EU proposal to amend the Directive on Administrative Cooperation in the field of taxation

Jean Kizito

Partner, Co-Head of the Japan Desk

KPMG in Luxembourg


EU proposal to amend the Directive on Administrative Cooperation in the field of taxation (DAC8)

Following the OECD’s CARF release, on 8th December 2022, the European Commission released a proposal for an amendment to the Directive on Administrative Cooperation (DAC), which is extended to include crypto assets. It is also proposed to amend the Common Reporting Standard to include electronic money products and central bank digital currencies.

In parallel to the work and discussions around the Markets in Crypto-Assets (MiCA) regulation and following in the steps of the recent CARF release, the European Commission published its proposal to amend the DAC.

With such fast-evolving technologies, it has become difficult for tax authorities to track new crypto-assets being transferred without the involvement of traditional financial intermediaries. This lack of oversight hinders transparency and prevents tax authorities from implementing tax initiatives. Indeed, in the recent years, European governments have joined forces to improve administrative cooperation to prevent tax fraud.

The DAC8 proposal is following these footsteps by improving cooperation between European Member States. Since the release of Council Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC), European Member States cooperate in sharing different information to fight against tax evasion and tax fraud. While this recent European Commission initiative is bringing forward another amendment to the DAC in the field of taxation, it is also broadening the scope of this Directive to include crypto-assets, central bank digital currencies and e-money.

Based on the EU Commission’s estimations, additional tax revenues could reach EUR 2.4 billion. On the flip side, the one-off costs incurred for implementing and automatic EU-wide reporting are estimated approximately at EUR 300 millions for the totality of reporting crypto-asset service providers and tax administrations, with recurrent costs around EUR 25 millions annually.

Who is responsible to report?

The proposal provides that the reporting responsibility lies with reporting crypto-asset service providers and crypto-asset operators, whether they are regulated by the relevant EU regulations, or not. Additionally, to avoid any discrimination and to put everyone on equal terms, the DAC8 proposal requires both European and non-European Union crypto asset operators to comply with the reporting of reportable users, resident in the European Union.

Who are the reportable crypto-asset users?

The Directive proposal defines a crypto-asset user as “an individual or entity that is a customer of a reporting crypto-asset service provider for the purposes of carrying out reportable transactions”. However, the proposal provides exemptions, such as regularly traded entities, governmental entities, international organizations,  central banks and certain financial institutions.

Such crypto-asset users will need to be documented with a self-certification form and reported, by the reporting crypto asset service provider, no later than 31 January of the year following the relevant year of the reportable transaction. The exchange between the tax authorities should occur one month later. For individuals who are crypto-asset users, prior notification, by the reporting crypto asset service provider, will be required in order to comply with GDPR rules.

Which transactions should be considered reportable?

Both domestic and cross-border transactions are covered by the proposal. Transactions in scope are “exchange transactions”, as well as “transfers of reportable crypto assets”.


The imposition of penalties for non-compliance will remain under the sovereign control of Member States. However, the Directive proposal provides Member States with harmonized penalties which should be “effective, proportionate and dissuasive”.

Date of application

In the current proposal, Member States should generally apply DAC8 provisions as of 1st January 2026.

KPMG is analyzing the DAC8 proposal and is well equipped to assist you in this process by carrying out a full review of all the entities and individuals required to report such assets and assess their level of readiness.

If you have any questions or would like additional advice, please get in touch.